Lots: standard, mini and micro
What you learn in 3 minutesA reader asked: "When I open a trade, what does 0,10 actually mean, and why does the platform show a different profit for the same move in price?" A lot is simply the size of one trade. It decides how much of the instrument that trade controls, so it decides what one pip of movement is worth in rand.
1,00, 0,10 and 0,01 lots on a R500 deposit
| Step | Amount | Note |
|---|---|---|
| Deposit | R500 | the money in the account before any trade |
| USD/ZAR price used | 18.4100 | the example rate for this lesson |
| 1,00 lot (standard) | 100,000 units | one standard lot |
| 0,10 lot (mini) | 10,000 units | one tenth of a standard lot |
| 0,01 lot (micro) | 1,000 units | one hundredth of a standard lot |
| Value of a 1 pip move on 0,01 lot | about R0,10 | 1,000 units x 0,0001 = 0,10 units of USD, converted at 18.4100 |
| Value of a 1 pip move on 0,10 lot | about R1,00 | 10,000 units x 0,0001 = 1,00 unit of USD, converted at 18.4100 |
| Value of a 1 pip move on 1,00 lot | about R10,00 | 100,000 units x 0,0001 = 10,00 units of USD, converted at 18.4100 |
| A 20 pip move against you on 0,01 lot | about R2,00 | 20 x R0,10 |
| A 20 pip move against you on 0,10 lot | about R20,00 | 20 x R1,00 |
| A 20 pip move against you on 1,00 lot | about R200,00 | 20 x R10,00 |
The exact pip value depends on the rate at the moment the trade is closed, and brokers vary in how they round it. Spread, commission and any swap are quoted or charged on top, and these differ between brokers.
The mistake people make here
The common mistake is to pick a lot size by how much profit it might make, not by how much a normal move would cost. On a R500 deposit, a 1,00 lot turns an ordinary 20 pip swing into about R200, which is 40% of the account. People also assume a smaller lot is a different product or a demo setting; it is the same trade, just smaller. Decide the rand amount you are willing to lose on the trade first, then work backwards to the lot size that keeps a realistic stop within it.Check yourself
On USD/ZAR, a 0,10 lot moves 30 pips in your favour. What is the gain before costs?
One pip on 0,10 lot is about R1,00, so 30 pips is about R30,00 before spread, commission and swap.
You have R500 and want a 25 pip stop to risk about R5,00. Which lot size fits?
R5,00 divided by 25 pips is R0,20 per pip. A 0,01 lot is about R0,10 per pip and a 0,10 lot is about R1,00 per pip, so 0,01 lot is the closest fit and risks about R2,50.