Lots, mini-lots and micro-lots: the unit measurement in Forex trading
There are some terms that are used in the Forex ‘dictionary’ that it is important to know to better understand the Forex topic. One of this is the ‘lot’, that is a term used to refer to an order of 100,000 units. So if we are dealing of one or two lots of a currencies, for example of pounds, we are dealing with one hundred thousand or two hundred thousands pounds. But as in this market we work with pairs of currencies, we can sell a lot of pound and, of course, we are not purchase a lot of euro, as the exchange from pound to euro is not one to one.
So sometimes can be useful to use ‘portions’ of lots. How to obtain them? We must introduce the mini lots and the micro lots, that are used in the same way we use centimetres and millimetres as portions of the metres. A mini lot of a currency correspond to ten thousand of that currency, while a micro lot correspond to one thousand. So, we can trade in mini lots or in micro lots if our trade is not so rich, and we do not arrive to move a lot.