Contract size

The contract size tells you what one lot actually is. Every pip value, margin requirement and profit figure flows from it, so it is the first thing to check in an instrument's specification before trading something new.

Common conventions (always confirm in your broker's contract specifications, because they vary):

• Forex: one lot is usually 100,000 units of the base currency.
• Gold (XAU/USD): one lot is commonly 100 troy ounces, but some brokers use different sizes.
• Silver (XAG/USD): one lot is commonly 5,000 troy ounces.
• Index and stock CFDs: one lot may mean one unit per index point, one share, or something else entirely.

Example

Illustrative figures: a trader used to forex knows that a $1 move in a currency quoted to four decimals is a huge amount, so they assume a $1 move in gold on one lot is small. But if one gold lot is 100 ounces, a $1 move in the gold price changes the position's value by $100. A $15 move in a day, which is not unusual for gold, is $1,500 on one lot.

Compare with EUR/USD: one lot is 100,000 euros, so a one-pip move (0.0001) is worth 100,000 × 0.0001 = $10.

The same "one lot" order can therefore carry very different risk from one instrument to the next. Multiplying contract size by price gives the notional value of the position.

Practical note

Many trading mistakes on gold and indices come from carrying forex assumptions across. The gold lot size calculator uses the contract size you enter, and our guide to gold CFD trading covers the specification in detail.