Check the contract unit

A common standard forex lot is 100,000 units of base currency, but other instruments can use different definitions. Gold, indices and platform-specific contracts require their own specifications.

Convert lots into quantity

With 100,000 units per lot, 0.1 lot represents 10,000 units and 0.01 represents 1,000. Combine that quantity with the price change for a gross result. Costs and margin remain separate calculations.

Account for size increments

Minimum sizes and increments can prevent an exact quantity from being entered. Rounding upward changes exposure. Compare the calculated quantity with the executable quantity rather than treating the difference as irrelevant.

Compare the actual quantity

If one hypothetical contract contains 1,000 units per lot and another 100, then 0.1 lot represents 100 and ten units respectively. Identical lot labels already conceal different quantities, before price levels and volatility add further differences to the exposure.

Source and reading notes

This is an independently written educational overview based on the ATFX reading linked below. Examples are illustrative, not live quotes or forecasts. It does not reproduce the original article or imply endorsement by its author.