On the GBP/USD, the nominal value per lot is £100,000.
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Start investing today or test a free demo Open real account Try demo Download mobile app Download mobile app This information can be found in the instrument specification table. Let’s say you’d like to open a 1 lot transaction on GBP/USD with leverage of 30:1, but you don’t know what the nominal value per lot is for this instrument. You will also suffer greater losses if the position moves against you. This allows you to potentially generate a higher return on the invested capital, but also makes the risk greater, meaning that you may need to deposit additional funds to cover your position. A typical leverage for FX is 1 to 30, which means that you’d only need 3.33% of the nominal value of the margin. For example, with a leverage of 30:1 you’d only need 3.33% of the nominal value for the margin of the transaction. Remember that with CFDs, you only need a fraction of the nominal value to be able to open a position. It's important to know what amount the margin will be so you can evaluate not only the risk itself, but also calculate whether the remaining funds will allow you to open additional positions. The margin is not a cost, but is an amount of money that is frozen when you open a position and returned to you once the transaction has been closed. When opening a trade, you will need a certain amount of outlay. In other words, understanding how the trading volume may affect you is crucial, because the volume you choose will determine both the margin per trade and pip value. The choice of trading volume will depend on many psychological factors, such as emotional comfort and risk aversion, but the choice of trading volume will also be highly connected with the risk management that you plan to apply. But how much money are you using for each position? It’s one thing to identify trends and spot trading opportunities. One of the first decisions you’ll need to make as a trader when beginning your trading journey is choosing a trading volume you can apply to your positions.
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