Standard Lot

Standard Lot

A standard lot is the equivalent of 100,000 units of the base currency in a forex trade. A standard lot represents 100,000 units of any currency, whereas a mini-lot represents 10,000 and a micro-lot represents 1,000 units of any currency. With the advent of online brokers and increased competition, it is possible for retail investors to make trades in amounts that aren't a standard lot, mini-lot, or micro-lot. It is one of the three commonly known lot sizes; the other two are mini-lot and micro-lot. In the interbank market, where banks trade with each other on platforms such as Reuters and EBS, the standard trading size (or standard lot) is 1 million units in the base currency.

Standard lots are the equivalent of 100,000 units of the base currency in a forex trade.

What Is a Standard Lot?

A standard lot is the equivalent of 100,000 units of the base currency in a forex trade. It is one of the three commonly known lot sizes; the other two are mini-lot and micro-lot.

In the world of finance, lot size refers to a measure of a quantity or increment of a particular asset or product which is deemed suitable for buying and selling. Different types of products are commonly available in different lot sizes. Historically, spot forex has only been traded in particular lots of 100, 1,000, 10,000, or 100,000 units. More recently, however, non-standard lot sizes are also available to forex traders.

Standard lots are the equivalent of 100,000 units of the base currency in a forex trade.
Online brokerages and increased competition have resulted in multiple forms and types of lot sizes.

Understanding a Standard Lot

A standard lot represents 100,000 units of any currency, whereas a mini-lot represents 10,000 and a micro-lot represents 1,000 units of any currency. A one-pip movement for a standard lot corresponds with a $10 change. For example, if you buy $100,000 against the Japanese yen at a rate of ¥110.00 and the exchange rate moves to ¥110.50, which is a 50 pip movement, you have made $500. Conversely, if the exchange rate falls 50 pips to ¥109.50 your net profit and loss are minus $500.

With the advent of online brokers and increased competition, it is possible for retail investors to make trades in amounts that aren't a standard lot, mini-lot, or micro-lot. For example, a nano-lot size consists of 100 units of a currency. In the interbank market, where banks trade with each other on platforms such as Reuters and EBS, the standard trading size (or standard lot) is 1 million units in the base currency.

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Related terms:

Base Currency

The first currency quoted in a currency pair on forex. It is also typically considered the domestic currency or accounting currency. read more

Foreign Exchange (Forex)

The foreign exchange (Forex) is the conversion of one currency into another currency. read more

Forex Mini Account

A forex mini account allows traders to participate in currency trades at low capital outlays by offering smaller lot sizes and pip than regular accounts. read more

Forex (FX) , Uses, & Examples

Forex (FX) is the market for trading international currencies. The name is a portmanteau of the words foreign and exchange. read more

Lot (Securities Trading)

A lot is amount of securities bought in a single transaction on an exchange. read more

Micro Account

A micro account caters primarily to the retail investor who seeks exposure to foreign exchange trading but doesn't want to risk a lot of money. read more

Micro Lot

Novice or introductory traders can use micro-lots, a contract for 1,000 units of a base currency, to minimize and/or fine-tune their position size. read more

Mini Lot

A mini lot is a currency trading lot size that is one-tenth the size of a standard lot of 100,000 units - or 10,000 units. read more