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What Contract Size Means in Forex and CFD Trading

Contract size is the quiet number behind pip value, notional and margin. It is what converts a price move into an amount of money, and it is not the same across instruments.

Written by PipGauge editorial team

Reviewed by PipGauge methodology review

Last updated 2026-07-06

Short answer. Contract size is how many units of the underlying one standard lot represents — 100,000 units of the base currency in forex, commonly 100 troy ounces for gold (broker-dependent; some use 10 oz), and a value per point for index CFDs. It is the multiplier that converts a price move into money, so pip value, notional value and margin all sit on top of it. Because it varies by instrument and even by broker, it is one of the first numbers to confirm before sizing a trade.

What this page is for

Contract size rarely gets its own explanation, yet it is the number underneath pip value, notional and margin. This page defines it, shows how it feeds those figures, and shows how it changes across forex, gold and index CFDs. It supports the broker contract specs page, where the actual per-instrument numbers live, and the lot size converter. Educational only, not advice.

How it works

Contract size is the units in one standard lot. It shows up in three places:

Notional value — the full size of the position: notional = contract size × price × lots.
Pip / point value — what one unit of price movement is worth. For forex and metals: pip value = pip size × contract size × lots. Index CFDs work differently: there the contract is already expressed as a cash value per point, so point value = broker's value per point per lot × lots — no pip-size multiplication involved.
Margin — the deposit, which is the notional divided by leverage, so it inherits the contract size too.

Because all three scale with it, contract size is the lever underneath your whole risk calculation, even though the platform rarely shows it directly.

Inputs and assumptions

Forex standard lot = 100,000 units of the base currency; mini = 10,000; micro = 1,000.
Gold (XAUUSD) standard lot is commonly 100 troy ounces; some brokers use 10.
Index CFDs express contract size as a value per point (for example $1 per point per lot), not a unit count.
Example prices below are round illustrations, not live quotes. Confirm the real contract size in your broker's specification.

Worked example 1 — forex, EUR/USD

One standard lot of EUR/USD has a contract size of 100,000 units of the base currency (euros). At a price of 1.0800, the notional value is 100,000 × 1.0800 = $108,000. One pip (0.0001) is worth 0.0001 × 100,000 = $10. Trade a 0.1 lot and both scale by a tenth: about $10,800 notional and $1 per pip. Nothing here is a special rule — it all comes from the 100,000-unit contract size.

Worked example 2 — gold, XAUUSD

Gold breaks the forex convention, which is exactly why contract size matters. One standard lot of XAUUSD is commonly 100 troy ounces, not 100,000 of anything. At an example price of 2,650.00, the notional value is 100 × 2,650.00 = $265,000. A one-dollar move in the gold price is therefore worth 100 × $1 = $100 per standard lot, and one pip is 100 × 0.01 = $1 under the common 0.01-per-pip definition — note that some brokers treat 0.1 as one gold pip instead, which makes it $10, so check which convention yours uses. If you had assumed a 100,000-unit contract, every one of those figures would be off by a factor of a thousand.

Common mistakes — why the number changes

Assuming 100,000 everywhere. That is the forex convention only. Gold, silver and indices use different contract sizes, and plugging 100,000 into a gold trade throws every downstream number out.
Confusing contract size with lot size. Contract size is units per standard lot; lot size is how many lots you trade. A 0.01 lot of EUR/USD is 1,000 units, not a different contract size.
Reading an index “lot” as a unit count. Index CFDs are quoted as a value per point, so their contract size behaves differently from a forex unit count.
Assuming brokers agree. Contract sizes for metals and indices vary between brokers; the correct one is in the specification for the account you actually trade.

Methodology and limitations

The conventions here — 100,000 units for a forex standard lot, 100 ounces for a standard gold lot — are the mainstream defaults and match the engines behind our pip value and gold pip value calculators. They are defaults, not guarantees: your broker may differ, particularly on metals and indices, so confirm against the broker contract specs or your own account. Example prices are illustrative, and figures are gross of spread, commission and swap. This is educational information for non-US retail traders, not investment, trading or financial advice. Last updated 2026-07-06.

Frequently asked questions

What is contract size in simple terms?

It is how many units of the underlying one lot represents — 100,000 units of the base currency for a standard forex lot, commonly 100 troy ounces for a standard gold lot (broker-dependent). It is the multiplier that turns a price move into money, so it sits underneath pip value, notional value and margin.

Is contract size the same as lot size?

They are linked but not identical. Contract size is the units in one standard lot; lot size is how many of those lots you trade. One standard lot of EUR/USD has a contract size of 100,000 units, and a 0.1 lot is one-tenth of it. The lot size converter moves between lots and units.

Do all instruments use 100,000?

No. 100,000 units is the forex standard-lot convention, but gold is commonly 100 ounces, silver often 5,000 ounces, and index CFDs are expressed as a value per point rather than a unit count. Assuming 100,000 everywhere is a common sizing error; check the broker specs.

How does contract size affect pip value and margin?

Both scale with it. Pip value is the pip size times the contract size times your lots, and notional value — which sets margin — is the contract size times price times lots. Change the contract size and both move in proportion, which is why it is worth confirming before you size.

Can two brokers use different contract sizes for the same instrument?

Yes, especially on metals and indices. One broker's gold lot might be 100 ounces and another's 10, and index point values vary widely. Always read the specific contract specification for the account you trade rather than assuming a market-wide default.