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Lots and pip value

Lesson 0.4 Free

Lots and pip value

Trade size is measured in lots. The lot size decides what one pip is worth in money, which turns a move in pips into a profit or loss in dollars.

In this lesson you learn how trade size is measured, how to work out what one pip is worth, and how to turn any move in pips into money.

  1. 1 A lot is a fixed amount of currency

    You do not type “1,000 euros” into a forex order. You choose a number of lots. One lot is a fixed amount of the base currency:

    NameVolumeUnits of base currency
    Standard lot1.00100,000
    Mini lot0.1010,000
    Micro lot0.011,000

    So 0.10 lot of EUR/USD is 10,000 euros, and 0.01 lot is 1,000 euros.

    Quick check

    1. Question 1 · Multiple choice

      Which volume is one micro lot?

  2. 2 What one pip is worth

    Pip value = units × pip size. The answer is in the quote currency.

    For EUR/USD the quote currency is the US dollar and the pip is 0.0001:

    • 1.00 lot: 100,000 × 0.0001 = US$10 per pip
    • 0.10 lot: 10,000 × 0.0001 = US$1 per pip
    • 0.01 lot: 1,000 × 0.0001 = US$0.10 per pip

    Now a move in pips becomes money. A 30-pip move on 0.10 lot is 30 × US$1 = US$30, gained or lost depending on which way you traded.

    Quick check

    1. Question 2 · Calculation

      What is the pip value of 0.30 lot of EUR/USD, in US dollars?

    2. Question 3 · Calculation

      You hold 0.05 lot of EUR/USD and the price moves 40 pips against you. How much have you lost, in US dollars?

  3. 3 When the dollar is not the quote currency

    On USD/JPY the quote currency is the yen and the pip is 0.01, so one standard lot is worth 100,000 × 0.01 = ¥1,000 per pip.

    To see that in dollars, divide by the price. On 10 March 2026 (USDJPY, daily chart, Pipstone price feed) USD/JPY closed at 158.078: ¥1,000 ÷ 158.078 = about US$6.33 per pip. When the price changes, the dollar value of a yen pip changes with it.

    Gold (XAUUSD), with this course’s assumptions: 1.00 lot = 100 ounces and one pip = 0.10, so 100 × 0.10 = US$10 per pip on 1.00 lot. Contract sizes vary, so check your own account.

  4. 4 The spread in money

    Lesson 0.2 showed a 1.2-pip spread on EUR/USD. On 0.10 lot that costs 1.2 × US$1 = US$1.20 the moment the trade opens. On 1.00 lot it is US$12. The bigger the volume, the bigger every cost and every move, in both directions.

  5. 5 In the terminal: change the volume

    Open the order ticket for EURUSD. Do not place anything yet. Set the volume (the ticket’s Lots field, or the quick buttons under it) to 0.01, then 0.10, then 1.00, and watch the Margin figure on the ticket change as you do.

    For each volume, work out the pip value yourself with the rule above (US$0.10, US$1, US$10). The ticket’s Margin should grow by ten times each step, just like your own.

    The practice terminal's EURUSD order ticket, signed in to a new practice account (staging, 16 Oct 2026; prices are the feed at capture time): the Lots field at 0.1 with quick buttons 0.01, 0.10, 0.50 and 1.00 under SELL and BUY, and the Margin figure for that volume above Free after.
    The practice terminal's EURUSD order ticket, signed in to a new practice account (staging, 16 Oct 2026; prices are the feed at capture time): the Lots field at 0.1 with quick buttons 0.01, 0.10, 0.50 and 1.00 under SELL and BUY, and the Margin figure for that volume above Free after.
    Open this in the terminal (opens in a new tab)

0 of 3 questions right. Answer them all to complete the lesson.