Micro-Lot

DEFINITION of 'Micro-Lot'

The equivalent to a contract for 1,000 units of the base currency in a forex trade. The base currency is the first currency in a pair, or the currency that the investors buys or sells. Trading in micro-lots enables traders to trade in small increments.

BREAKING DOWN 'Micro-Lot'

When an investor places an order for a micro lot, this means they have placed an order for 1,000 units of the currency being bought or sold. For example, in a USD/AUD currency pair, the U.S. dollar is the base currency.





Investors use micro-lot sizes when they prefer not to trade mini or standard lots. Ten mini lots is equal to 100 micro lots, which is equal to one standard lot.



RELATED TERMS
  1. Standard Lot

    The equivalent to 100,000 units of the base currency in a forex ...
  2. Currency Pair

    The quotation and pricing structure of the currencies traded ...
  3. Micro Account

    A forex trade made up of contracts for 1,000 units of currency. ...
  4. Base Currency

    The first currency quoted in a currency pair on forex. It is ...
  5. Mini Forex Account

    A type of forex account that allows the trader to enter positions ...
  6. Counter Currency

    The currency used as the reference or second currency in a currency ...
Related Articles
  1. Forex Education

    Forex Minis Shrink Risk Exposure

    Trading less than a standard lot means getting in for less - and having less to lose.
  2. Forex

    More On Quotes

    Learning about spreads and pips in forex and the different ways currencies can be quoted.
  3. Forex Education

    Forex Tutorial: Reading a Forex Quote and Understanding the Jargon

    One of the biggest sources of confusion for those new to the currency market is the standard for quoting currencies. In this section, we'll go over currency quotations and how they work in ...
  4. Forex

    Currencies

    The major currencies in the forex market.
  5. Forex Education

    How Do You Make Money Trading Money?

    Making money in the foreign exchange market is a speculative process. You are betting that the value of one currency will increase relative to another.
  6. Forex Education

    Forex Currencies: Conclusion

    By Brian Perry Conclusion The currency markets are the largest and most actively traded financial markets in the world with daily trading volume of more than $3 trillion (Triennial Central ...
  7. Forex Education

    The Forex Market: Who Trades Currency And Why

    The forex market has a lot of unique attributes that may come as a surprise for new traders.
  8. Forex Education

    Forex Tutorial: Currency Trading Summary

    While this online forex tutorial only represents a fraction of all there is to know about forex trading, we hope that you've gained some insight into this topic. We also encourage those of you ...
  9. Forex

    Reading A Quote

    Reading a currency quot can be confusing, make sense of numbers you will see.
  10. Forex Education

    How To Become A Successful Part-Time Forex Trader

    Getting started in this potentially profitable market is easier than you might think.
RELATED FAQS
  1. What are the advantages of using a mini forex account for trading?

    A mini forex trading account involves using a trading lot that is one-tenth the size of the standard lot of 100,000 units. ... Read Answer >>
  2. How do you make money trading money?

    Investors can trade almost any currency in the world. Investors, as individuals, countries, and corporations, may trade in ... Read Answer >>
  3. Where did the term 'pip' in currency exchange come from?

    Learn the definition of a pip, what it means in the scope of currency exchanges and how to determine its value. Find out ... Read Answer >>
  4. Why is the U.S. dollar shown on the top of some currency pairs and on the bottom ...

    All currencies are traded in pairs. The first currency in the pair is called the base currency while the second is called ... Read Answer >>
  5. Why isn't the EUR/USD currency pair quoted as USD/EUR?

    In a currency pair, the first currency in the pair is called the base currency and the second is called the quote currency. ... Read Answer >>
  6. How is spread calculated when trading in the forex market?

    First, remember that in the forex markets investors trade one currency for another. Therefore, currencies are quoted in terms ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center