Trading Contracts in the Currency Market | BR Trading

Trading Contracts in the Currency Market


Trading in the forex market is conducted in specific quantities and sizes, using standard units known as LOTS or CONTRACTS.

Trading contracts in the forex market are divided into three sizes:

1. Standard Lot (1.00)

  • Appears in trading platforms as 1.00

  • Equals 100,000 units of the base currency.

2. Mini Lot (0.10)

  • Appears as 0.10

  • Equals 10,000 units of the base currency.

3. Micro Lot (0.01)

  • Appears as 0.01

  • Equals 1,000 units of the base currency.

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Understanding Trading Contracts

Trading contracts are very similar to the number of shares you want to buy in a company.

Example:
Buying 1,000 shares of Apple is conceptually the same as buying 1,000 units of the US Dollar against the Japanese Yen — which would be equivalent to a micro lot of the USD/JPY currency pair.

Let’s take another example:

If you open a buy position on the USD/CAD pair with a lot size of 1.25, this means your total trade size is 125,000 units of the US Dollar, broken down as follows:

  • 1 Standard Lot = 100,000 units of USD

  • 2 Mini Lots = 20,000 units of USD

  • 5 Micro Lots = 5,000 units of USD


📘 Stay tuned for the next lesson to discover more insights about the Forex market.