What Lot Size Can I Trade?
We get a lot of questions about lot sizes and if you’ve come from the Futures markets, CFDs are calculated differently.
Here’s the formula:
Step one
Account size X leverage to get your ‘buying power’.
For example, $100,000 x 10 = $1,000,000 buying power.
Step two
The price of the asset
For example, the price of the Nasdaq at 14,000.
Step three
The buying power divided by the price of the asset
For example 1,000,000 / 14,000 = 71.42 lots.
Step four
The lots are divided by the number of contracts per lot (for the index markets this is 10).
71.42 / 10 = 7.14 lots.
So:
Account size X leverage / asset value / contacts per lot = the maximum lot size you can trade.
Here’s a table with numerous examples:
Spot Prices correct 09/02/2022
So what does this mean in monetary terms? Well what we’d suggest is not focusing on the dollar per point, pip or tick, but instead look at risk in % terms and where you need a stop loss, and putting the position sizing second. Our Demon Scalper Expert Advisor is designed to do this for trading ‘at market’ instant execution. For placing orders in the market, we also offer a FT+ risk management tool. You can download both of these for free from our FAQs page.
8cap also provide a suite of plug-ins you may want to use to trade with which can be found here:
However, if you are interested in monetary amounts then here is a table with some examples:
Figures valid 18/01/22
Numbers will vary depending on currency rates at time of trade.
Max trade volume is dependent on margin not being used on other trades.
One Response
brilliant mike as always very well explained