WHAT IS A LOT?
EXAMPLE
Assuming that the average spot price of the Eurusd parity is 1.1200; when an investor who thinks that prices will increase in the Eurusd parity wants to buy 1 lot, he actually sells 1.1200 * 100.000 = 112.000 $ and buys a transaction size of 100.000 EURO. Here, the purchased currency, the euro, consists of 100,000 units, i.e. 1 lot. It should be noted that the size of 100,000 euros is not a real amount obtained, but a transaction size that is shared in profit or loss with a certain amount of collateral and preferred leverage effect.
LOT TYPES
In the forex market, traders may prefer to trade with smaller trading volumes instead of a trading volume of 1 lot. The most common lot types traders use in forex are mini lot and micro lot.
Mini Lot
A Mini Lot is equal to 0.1 lot or 10,000 units. For example, if we assume that the price of the EURUSD pair is 1.1200 again, the trading volume of 0.1 lot is equal to 10.000*1.1200= $11.200.
Micro Lot
A micro lot is equal to 0.01 lot or 1000 units. For example, if we assume that the price of the EURUSD pair is 1.1200, the trading volume of 0.01 lot is equal to 1000*1.1200= $1120.
