Lots: standard, mini and micro
Contract size and the units behind the lot
A lot is not a separate thing from the instrument. It is a count of units of USD/INR. When you open one standard lot, you are trading 100,000 units of the pair. A mini lot is 10,000 units, and a micro lot is 1,000 units. The platform shows the lot label, but the label stands for a fixed number of units.
The unit count comes from the contract specification. For USD/INR, the base unit is one US dollar, quoted in rupees. So 100,000 units means 100,000 US dollars against rupees. That is why the pip value is in rupees: the pair is already quoted in rupees, and the pip movement is measured in the quote currency.
If you change the lot size, you change the unit count, and the pip value changes in direct proportion. Half the units means half the pip value. Double the units means double the pip value. There is no separate setting for risk. The lot size is the risk setting.
Pip value arithmetic from unit count
To find the pip value in rupees, multiply the unit count by the pip size. For USD/INR, one pip is 0.0001. On 100,000 units, 100,000 x 0.0001 = 10. That is ₹10 per pip. On 10,000 units, 10,000 x 0.0001 = 1. That is ₹1 per pip. On 1,000 units, 1,000 x 0.0001 = 0.10. That is ₹0.10 per pip.
The arithmetic works for any unit count. If you trade 5,000 units, the pip value is 5,000 x 0.0001 = ₹0.50. If you trade 50,000 units, it is ₹5. You can check the platform's figure against this sum. If the platform shows a different number, the difference comes from the exchange rate used or from rounding, not from a different rule.
This sum is the only one you need for position sizing. Decide the loss in rupees you are willing to accept on a trade. Divide that amount by the pip value. The result is the number of pips the price can move against you before the loss reaches your limit. If that number is too small for the trade to have room to work, the lot size is too large.
Choosing a lot size from a rupee limit
Start with the deposit, not with the lot. On a ₹500 account, a loss of ₹50 is ten per cent of the deposit. A loss of ₹5 is one per cent. Many beginners treat ₹50 as small because it is a round number. It is not small against ₹500. The same 50 pip move that costs ₹5 on a micro lot costs ₹500 on a standard lot, which is the whole deposit.
Work backwards from the loss limit. Suppose you will accept a ₹10 loss on a trade and you expect the stop to sit 50 pips away. ₹10 divided by 50 pips = ₹0.20 per pip. The micro lot pip value is ₹0.10, so ₹0.20 per pip is two micro lots, or 2,000 units. The lot size is now a result of two decisions you made first: the rupee limit and the stop distance.
The stop distance is not fixed. It comes from the chart and from how much the price normally moves. If the stop must be 100 pips away, the same ₹10 limit gives ₹0.10 per pip, which is one micro lot. A wider stop forces a smaller lot for the same rupee risk. That trade-off is the whole of position sizing. There is no lot size that is right on its own.
Three lot sizes on a ₹500 deposit
| Step | Amount | Note |
|---|---|---|
| Standard lot | 100,000 units | The base size. One pip on USD/INR is ₹10, because 100,000 x 0.0001 = 10. |
| Mini lot | 10,000 units | One tenth of a standard lot. One pip is ₹1, because 10,000 x 0.0001 = 1. |
| Micro lot | 1,000 units | One hundredth of a standard lot. One pip is ₹0.10, because 1,000 x 0.0001 = 0.10. |
| Deposit | ₹500 | The account balance used for this example. |
| Risk step, standard lot | ₹10 per pip | A 50 pip move against the position is 50 x ₹10 = ₹500, the whole deposit. |
| Risk step, mini lot | ₹1 per pip | A 50 pip move against the position is 50 x ₹1 = ₹50, one tenth of the deposit. |
| Risk step, micro lot | ₹0.10 per pip | A 50 pip move against the position is 50 x ₹0.10 = ₹5, one hundredth of the deposit. |
The exact pip value can differ slightly between brokers because of the exchange rate used, rounding, and any commission or spread added on top. Always check the contract specification page of the platform you use.
Doing it once, step by step
The following steps turn a deposit and a stop distance into a lot size, in order. Do them before you open the trade, not after.
- 01
Write the deposit in rupees
Open the account page and note the balance in INR. Do not use the margin figure, which is money the broker has set aside. Use the equity, which is what remains if open positions are closed. This number is the base for every limit that follows.
- 02
Set the maximum loss in rupees
Choose an amount you can lose on one trade without changing your plans. A common starting point is one per cent of the deposit, but the figure is yours. On ₹500, one per cent is ₹5. Write it down before you look at any lot size.
- 03
Measure the stop distance in pips
Look at the chart and find where the trade idea is wrong. The distance from entry to that point is the stop, in pips. If the price would have to move 40 pips to prove the idea wrong, the stop is 40 pips. This number comes from the chart, not from the lot size.
- 04
Divide the loss limit by the stop distance
₹5 divided by 40 pips = ₹0.125 per pip. This is the pip value the trade can carry. It is the bridge between the rupee limit and the lot size. If the result is below the micro lot pip value of ₹0.10, the trade is too large for the deposit at that stop distance.
- 05
Convert the pip value into units
Divide the allowed pip value by 0.0001. ₹0.125 divided by 0.0001 = 1,250 units. That is 1.25 micro lots. Some platforms allow fractional micro lots, and some round to the nearest whole micro lot. If yours rounds, round down, because rounding up raises the risk above the limit you set.
- 06
Check the contract specification
Open the contract specification page for USD/INR on your platform. Confirm the pip size, the unit count per lot, and any commission or spread that is added. The exact pip value can differ slightly between brokers because of the exchange rate used and rounding. Use the platform's figure for the final check, and keep the rupee limit as the fixed point.
The mistake most people make here
The common mistake is to choose a lot size by what looks exciting rather than by what the deposit can absorb. A trader with ₹500 may open one standard lot because the profit per pip looks large, then a normal 50 pip move against the position wipes out the account. Instead, start from the pip value and work backwards: decide the largest loss that is acceptable in rupees, then divide it by the pip value to find the lot size. On a ₹500 deposit, a micro lot keeps a 50 pip move to about ₹5, which leaves room to learn.Check yourself
On a mini lot of USD/INR, what is the value of one pip in rupees?
A mini lot is 10,000 units. One pip is 0.0001, so 10,000 x 0.0001 = ₹1 per pip.
If a trade on a micro lot moves 30 pips in your favour, what is the gross profit before costs?
One pip on a micro lot is ₹0.10. So 30 x ₹0.10 = ₹3.
A trader with ₹500 wants the maximum loss from a 40 pip move to be ₹20. Which lot size fits?
₹20 divided by 40 pips = ₹0.50 per pip. That is five times the micro lot pip value of ₹0.10, so the size is five micro lots, or 5,000 units.
Questions that come up next
How do I know which lot size my platform is using when I place a trade?
The platform shows the lot size in the order ticket, usually as a number of lots or a number of units. One standard lot is 100,000 units, a mini lot is 10,000 units, and a micro lot is 1,000 units. Some platforms let you type the unit count directly. If you are unsure, check the contract specification page for USD/INR. It lists the unit size for each lot label.
Can I trade a fraction of a micro lot?
It depends on the broker. Some allow 0.1 micro lots, which is 100 units, giving a pip value of ₹0.01. Others set a minimum of one micro lot. The contract specification page states the smallest trade size allowed. If fractions are allowed, you can match the lot size more closely to your rupee limit. If not, you round down to the nearest whole micro lot.
Why does the pip value on my platform differ slightly from the sum I did?
The difference comes from the exchange rate used to convert the pip value into rupees, from rounding, or from any commission or spread added on top. Your sum uses the pip size and the unit count, which are fixed. The platform may use a slightly different rate at the moment you open the trade. Check the contract specification page for the exact method your broker uses.
If I use a smaller lot size, do I still need a stop loss?
Yes. A smaller lot size lowers the money lost per pip, but it does not cap the number of pips the price can move against you. Without a stop loss, a large move can still cost more than you planned. The lot size sets the rate at which loss builds. The stop loss sets the point where the trade ends. Both work together.
How do I work out the lot size from a rupee loss limit?
Decide the maximum rupees you will accept losing on the trade. Divide that amount by the pip value you want per pip. For example, a ₹15 limit with a 30 pip stop means you need a pip value of ₹0.50. That is five micro lots, or 5,000 units. If the result is not a whole number of micro lots, round down to the nearest whole micro lot.
Does the lot size change the spread or commission I pay?
Yes, usually in proportion. A larger lot size means a larger position, so the spread cost and any commission are larger in rupee terms. For example, if the spread is one pip, a micro lot costs ₹0.10 in spread, while a standard lot costs ₹10. The exact cost varies between brokers and is shown on the platform before you confirm the trade.
The words used on this page
- Lot
- A lot is a fixed number of units of the instrument. For USD/INR, one standard lot is 100,000 units, a mini lot is 10,000 units, and a micro lot is 1,000 units. The lot size you choose sets how much money each pip of movement is worth.
- Pip
- A pip is the smallest standard move in a currency pair's price. For USD/INR, one pip is 0.0001. The value of one pip in rupees depends on your lot size. On a micro lot, one pip is ₹0.10.
- Contract specification
- The contract specification is the page on your trading platform that lists the details of an instrument. It shows the unit size for each lot, the pip size, the minimum trade size, and any commission. You can check it to confirm the pip value before you trade.
- Stop loss
- A stop loss is an order that closes your trade at a chosen price to limit your loss. It sets the maximum number of pips you are willing to lose. Combined with your lot size, it controls the maximum rupees at risk.
- Position sizing
- Position sizing is the process of choosing a lot size based on how much you are willing to lose. You start with a rupee limit, divide it by your intended pip value, and round down to the nearest whole micro lot. It keeps the risk on each trade within your plan.
- Deposit
- The deposit is the money you put into your trading account. It is the base for measuring risk. A loss of ₹5 on a ₹500 deposit is one per cent. A loss of ₹50 is ten per cent. The lot size you choose should keep losses small relative to the deposit.
What to take away
- A lot is a count of units: standard is 100,000, mini is 10,000, micro is 1,000.
- Pip value in rupees equals unit count multiplied by 0.0001 for USD/INR.
- Choose the lot size from the rupee loss you can accept, not from the profit per pip.
- Check the contract specification page because pip values can vary slightly between brokers.