The unit of foreign exchange transaction volume is hand, and we often measure the amount of foreign exchange speculation that we have traded 1 lot and 2 lots, etc. It is precisely because the unit of foreign exchange transaction volume is lot that many newbies are relatively unfamiliar with this concept.
1 lot of foreign exchange trading volume is the abbreviation of 1 standard lot. If 1 standard lot is converted into our usual foreign exchange contract unit, it is 100,000 contracts. For example, if we buy 1 standard lot of USD/JPY , it means that we have bought 100,000 USD of JPY. However, when we trade in normal times, due to the existence of high leverage, if we trade 1 lot of products, we only need a few hundred dollars of margin to trade.
The unit of foreign exchange trading volume is 1 lot, but it does not mean that investors need to trade 1 lot each time. When speculating in foreign exchange, the investor’s trading volume is less than 0.01 lot each time, and only a few dollars of margin can be used. Therefore, investors do not have to think about how high foreign exchange trading is, it is just a product that can be traded with only a little money.
In external trading, not only foreign exchange, but also gold is traded in lots. The trading volume of 1 lot of gold products is 100 ounces of gold.