Home Uncategorized What is Lot 2021? Types And Lot Calculator – Introduction To Forex

# What is Lot 2021? Types And Lot Calculator – Introduction To Forex

## What is Lot 2021? Types And Lot Calculator – Introduction To Forex

Lot; It can be named as the volume size of the transactions made in the Forex market. Lot the higher the investor’s earnings increase. At the same time, the increase in the lot increases the risk of the transaction. Therefore, the investor who will trade in the Forex market must first gain experience in the Forex market. In this process, instead of trading with the lot, it should perform trial transactions with nano or micro lot. 1 lot equals 100,000 units. The number of units of 1 lot varies according to the types of investment instruments. The investor must be able to calculate lots to know how many trades to open.

## What is Lot Definition?

Lot means word Looking at; It has meanings such as to share, to share and to share by lot. Forex marketWhen looking at the size of the lot; 1 lot consists of 100,000 units. In addition, the size of the transactions of investors who will trade in the Forex market is expressed in terms of lots. The given transaction order appears as a lot in the system. Therefore, 1 lot for each parity is equal to the size of 100,000 of the unit indicated on the left of the exchange rate.

## What are the Lot Types?

Lot types are determined according to the trading volume preferred by the investors.The types of lots preferred by investors are as follows:

• Mini lot: It is equal to 0.1 lot. This means that it corresponds to 10,000 units. If it is necessary to give an example; Suppose you are an investor who will trade with the EUR / USD parity. Let the price of the pair be calculated as 1.1200. If a transaction volume of 0.1 lots will be calculated for the purchase; The value 1.1200 should be multiplied by 10.000. 11,200 dollars are obtained.
• Micro lot: It is equal to 0.01 lot. Looking at the size; It is 1,000 units. If it is necessary to give an example on EUR / USD parity; When the price of the pair is multiplied by 1.1200 by 1.000, there is a value of 1.120 dollars.
• Nano lot: It is a unit of lots available only at some Forex brokers. These accounts can be opened with very low collateral amounts such as 5-10 dollars. It is a type of lot that is mostly preferred to experience the company’s service approach and develop new trading strategies. If a transaction of 1 nano lot will be made in USD / TRY parity; If a \$ 100 transaction will be made with a leverage of 1: 100, a \$ 1 deposit is required.

## How Much Does 1 Lot Equivalent?

To calculate the value of 1 lot Looking at; 1 lot equals 100,000 units, which means that 100,000 units were purchased from the currency on the left of the pair. If it is necessary to give an example to this situation by including the leverage ratio; Suppose a 1 lot purchase will be made at USD / TRY parity. This means that 100,000 dollars will be purchased. If a purchase is made with a leverage ratio of 1: 100, the transaction will be made for \$ 1,000. If a purchase is made with a leverage ratio of 1: 500; A purchase of 100,000 dollars can be made for 200 dollars. Lot Calculation

## What is Lot Calculation Example?

If it is necessary to look at the example of the size of the lot; Consider the average spot price of the EUR / USD parity as 1.1200. An investor who thinks that the prices in this pair will increase, consider making a 1-lot purchase. If it is necessary to calculate the transaction size; with an average spot price of 1 lot Since it consists of 100,000 units, 100,000 must be multiplied and the result is \$ 112,000. This means that by selling 112,000 dollars, the transaction size of 100,000 euros was taken. However, the investor should know at this point that 100,000 euros does not represent a real amount. 100.000 euro represents the size of the transaction in which the margin is shared with the profit and loss ratio resulting from the leverage effect.

## How is Lot Concept in Commodity and CFD Products?

Lot unit for commodity and CFDvaries according to the position size of the currencies. Commodity and CFD position sizes are given below:

• 1 lot of gold equates to 100 ounces. Gold price should be multiplied by 100 when calculating the position size.
• For silver, 1 lot equals 5,000 ounces. The position size can be found by multiplying the price of 5.000 with the silver price.
• In natural gas, 1 lot is expressed as 100,000 cubic meters.
• In American crude oil, 1 lot equals 1,000 barrels. Position size is obtained with the price of 1.000 * USOIL.
• 1 lot of Brent oil is 1,000 barrels. Position size can be calculated by multiplying the UKOIL price by 1.000.
• 1 lot of copper is 10,000 LBS. When the price is multiplied by 10,000, the position size is found.
• For the Dow Jones index, 1 lot is 10 contracts. When the price of US30 is multiplied by 10, the position size is obtained.
• In the S&P index, 1 lot is 100 contracts. The position size can be seen when the SP500 price is multiplied by 100.
• Those who want to calculate position size for the German index need to know that 1 lot is equal to 10 contracts. When the GER30 price is multiplied by 10, the position size is obtained.

## What is the Effect of Lot Size on the Collateral Amount?

Looking at the relationship between the lot and the collateral; The increase in the lot amount necessitates the increase in the amount of collateral. With the leverage ratio, while the currency price to be invested is kept constant, if the lot amount increases, the collateral should increase, if the lot amount decreases, the collateral should decrease.

If it is necessary to give an example; With a leverage of 1: 100, transactions will be made in EUR / USD parity. The price level of the pair is; Let it be 1.1200. When the collateral amount is calculated for the investor who will buy 1 lot; (1.1200 * 100.000 * 1) / 100 transaction is \$ 1.120. If the lot amount is reduced to 0.1 by decreasing it; The result of 112 dollars is obtained from (1.1200 * 100.000 * 0.1) / 100 transaction. Therefore, decreasing the lot amount decreases the collateral amount.

Another factor affecting the collateral amount is the leverage ratio. When the lot amount is fixed and the parity price is unchanged, increasing the leverage ratio enables transactions in the same transaction volume with a lower collateral amount. Under normal conditions, the increase in the leverage ratio increases the risk. However, if the leverage ratio is increased while the lot amount is fixed; the risk decreases and the minimum coverage amount also decreases.

## What Does Lot Refunds Mean?

Lot refund; It is the name given to the payment made by intermediary institutions in order to support investors and motivate investors in cases where investors make profit and loss. Some companies make this promotional payment without setting a transaction volume limit. However, some companies set transaction limits for promotional payments. While some of them are required to have a 10-lot transaction, some companies may have a 50-lot transaction. Considering the average prices in the market; The promotion paid per lot is on average 10 dollars.

The promotional payment amount of each institution varies. Another factor determining the promotion amount is; transaction type. If it is necessary to give an example; \$ 7 for foreign exchange transactions, \$ 5 for gold transactions, and \$ 3 for CFD transactions. With these promotional payments, investors lot It is aimed to make more transactions with. Especially with these campaigns, many Forex company are available.

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