In plain English
What Lot means
A lot answers “how much currency is the position?” rather than “how much cash was deposited?” For EUR/USD, 1.00 standard lot commonly represents €100,000 because EUR is the base currency. Many platforms permit 0.10 or 0.01 lots, but the minimum increment, contract size, margin required, and available instruments are product-specific.
Why it matters
Lot size directly affects notional value and the cash impact of a price movement. Larger lots can magnify gains and losses, particularly where leverage is used. Before entering an order, the relevant figures are the base-unit amount, the order-size increment, the pip value in the account currency, and the margin requirement.
Example
For EUR/USD, assume one standard lot represents €100,000. An order of 0.10 lot represents €10,000, while 0.01 lot represents €1,000. If a 0.10-lot position moves by one pip, or 0.0001 USD per EUR, its simplified U.S.-dollar price effect is €10,000 × 0.0001 = $1.
Quick answers
Common questions
Does 1 lot always equal 100,000 units?+
Not always. In retail forex, 1 standard lot commonly equals 100,000 units of the base currency, but the broker’s instrument specification controls. Other products, including CFDs and FX futures, can use different contract-size definitions.
What currency is measured by a forex lot?+
For a conventional spot-FX position, the lot normally measures units of the base currency, the first currency in the pair. For example, 1 standard lot of GBP/USD commonly represents £100,000, not $100,000.
Sources