Micro lot

A micro lot is 1,000 units of the base currency, one hundredth of a standard lot. On most platforms 0.01 is the minimum volume and the size of each step, so every forex position is effectively a whole number of micro lots.

Example

Illustrative figures on GBP/USD:

• One pip on 1,000 pounds is 1,000 × 0.0001 = $0.10.
• A 30-pip stop on one micro lot risks about $3.
• Five micro lots (0.05) with the same stop risk about $15.

Micro lots make precise position sizing possible on small accounts. With $1,000 and a 1% risk limit ($10) on a 30-pip stop, the arithmetic gives $0.33 a pip, or 0.033 lots. Rounding down gives 0.03 lots: three micro lots, risking about $9. Without micro lots, the smallest available size might have been too large for the stop.

Practical notes

• Costs scale with size, but some do not shrink in proportion. Fixed minimum commissions, if a broker has them, can make very small trades relatively expensive.
• Micro lots are useful for moving from a demo account to live trading with small real stakes, which is when execution, slippage and emotions first become real.
• On gold and other CFDs, 0.01 lots means one hundredth of whatever the contract size is, which can still be a sizeable exposure.

Our guide to moving from a demo account to live trading explains why starting small is common practice, and the position size calculator handles the rounding.