What is a 'Standard Lot'

A standard lot is the equivalent to 100,000 units of the base currency in a forex trade. A standard lot is similar to trade size. It is one of the three commonly known lot sizes; the other two are mini-lot and micro-lot. 

BREAKING DOWN 'Standard Lot'

A standard lot represents 100,000 units of any currency, whereas a mini-lot represents 10,000 and a micro-lot represents 1,000 units of any currency. A one-pip movement for a standard lot corresponds with a $10 change. For example, if you buy $100,000 against the Japanese yen at a rate of  ¥110.00 and the exchange rate moves to ¥110.50, which is a 50 pip movement, you have made $500. Conversely, if the exchange rate falls 50 pips to ¥109.50  your net profit and loss is minus $500. 

With the advent of online brokers and increased competition it is possible for retail investors to make trades in amounts that aren't a standard lot, mini-lot, or micro-lot. 

In the interbank market where banks trades with each other on platforms such as Reuters and EBS, the standard trading size, or standard lot, is 1 million units in the base currency. 

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