Lot definition

Lot has a particular significance in relation to IG's platform. Here, we define lot in general investing and explain what it means to you when trading with IG.

What is a lot?

A lot is a standardised group of assets that is traded instead of a single asset.

Often, the actual value of an asset or security means that trading a single unit of it isn’t viable. In these cases, traders will use a lot: a set amount of a particular asset that is the amount you buy or sell with each transaction. It means that investors have a standardised contract and always known how much of an asset they are trading when they open a position.

A lot can refer to any asset class or financial instrument. In options trading they are often standardised across the board: an equity option, for instance, is priced so that each lot is equal to 100 shares of the underlying asset.

Lot sizes at IG

IG uses lots when CFD trading, where a single contract can be equal to a larger amount of the underlying asset.

Lot sizes at IG vary between different markets and contracts. Some markets have mini or micro contracts, which are a fraction of the standard contract size.

Consequently, the lot sizes of these smaller contracts are a fraction of the standard.

When looking at market information, the value of one point gives you an indication of the lot size for this market.

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Difference between pips and lots

Pip value is the value attributed to a one-pip move in a forex trade, while a lot can refer to any asset class or financial instrument.

Lot example

For example, the Australia 200 market has 3 different contract sizes. The standard, mini and micro.

The standard contract has a lot size of A$25, the mini A$5 and the micro A$1.

When the Australia 200 is trading at 6000, the notional value of each contract is as follows:

Standard: 6000 x A$25 = A$150,000

Mini: 6000 x A$5 = A$30,000

Micro: 6000 x A$1 = A$6,000

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