Contract Sizes

Each standard lot traded in the Forex market is a 100,000 (of the base currency) contract. In other words, when trading one lot in a standard account, a trader is essentially placing a $100,000 trade in the market. Without leverage, many investors would not be able to afford such a transaction. Leverage of 1:100 would allow a trader to place the same one lot ($100,000) trade by posting $1,000 in margin.

Many retail Forex brokers also offer the ability to trade mini lots. Mini lots essentially allow the trader to trade one tenth of a standard lot. Trading in this size is often referred to as trading a mini lot. Mini lot contracts are $10,000 (of the base currency). A trade of one mini lot would be a $10,000 trade. Trading with 1:100 leverage would mean that $100 of margin would control a $10,000 contract.

Here at XtreamForex we have also introduced the Micro account offering 1:1000 leverage and a minimum trade size of 1 micro lot or $1,000.