In plain English
What Micro lot means
A micro lot measures the quantity being traded, not the trade’s direction or likely outcome. If a position is one micro lot of GBP/USD, it represents 1,000 British pounds. For pairs quoted in U.S. dollars, one pip on a 1,000-unit position is often about $0.10, although the precise amount can vary after conversion and by currency pair.
Why it matters
Micro lots allow more granular position sizing than mini or standard lots. That can make it easier to align exposure with a chosen monetary risk limit, but leverage can still make a small deposit control a larger position. Spreads, commissions, and overnight charges may also be meaningful relative to a small position’s potential profit or loss.
Example
Suppose a trader sells one 1,000-unit EUR/USD micro lot at 1.0800 and buys it back at 1.0775. The decline is 25 pips, or $0.0025 per euro. Ignoring transaction and financing costs, the profit is 1,000 × $0.0025 = $2.50. If the pair rose by 25 pips instead, the loss would be $2.50.
Quick answers
Common questions
How many units are in a micro lot?+
A conventional forex micro lot is 1,000 units of the base currency. Thus, one micro lot of USD/JPY represents 1,000 U.S. dollars, while one micro lot of EUR/USD represents 1,000 euros.
Does a micro lot require less margin?+
For the same currency pair and leverage setting, a micro lot generally requires less margin than a mini or standard lot because its notional value is lower. The actual margin requirement depends on the broker, account type, jurisdiction, and current price.
Sources