Contract Specification
Also called Contract specs, Symbol specification, Instrument specification, Symbol properties
A contract specification is the broker's rulebook for one tradable instrument: how many units one lot holds, the smallest price step, what that step is worth, trading hours, margin and overnight fees.
The same order of "1 lot" can mean very different amounts of money on different instruments or at different brokers. If you size a trade without checking the specification first, your stop-loss can cost you several times what you planned.
The fields that change your profit, loss and costs
Each instrument has its own specification. The fields below decide how much money moves with each tick and what a trade costs to hold.
| Field | What it tells you | Why it matters to you |
|---|---|---|
| Contract size | Units in 1 lot (e.g. 100,000 euros, or a set number of ounces) | Sets the money per price move |
| Tick size | Smallest price step the quote can move (e.g. 0.00001 on a 5-digit pair, 0.01 on gold) | The step your stops and targets sit on |
| Tick value | Money gained or lost per tick for 1 lot | Main input for position sizing |
| Volume min / max / step | Smallest order, largest order, size increments | Decides whether your calculated size can be placed at all |
| Margin rate | Multiplier applied to the normal margin requirement | Decides how much free margin is left |
| Swap long / short | Overnight charge or credit for each side | Cost of holding past the daily rollover |
| Trading sessions | Hours when you can open and close trades | Whether you can exit before a weekend or holiday |
| Minimum stop distance (some platforms call it stops level) | Minimum distance from price for pending orders and stops | Whether a tight stop is accepted |
Many platforms call one tick a point. On a 5-digit EUR/USD quote, 1 point = 0.00001, which is one-tenth of a pip.
A margin rate of 1.00 means the normal leverage rule applies. A rate of 0.50 would halve the margin, and 2.00 would double it.
Tick value is the field traders misread most often. When the instrument's profit currency is not your account currency, the tick value is converted at the current exchange rate, so it moves a little every day.
The panel below shows how these fields can look for a gold symbol. The layout and names will differ on your platform, but the three highlighted fields are the ones you use to size a trade.
Sizing one trade from the specification: a worked example
The figures here are an illustrative example with round numbers. You have a $10,000 account and want to risk $100 on each trade.
On EUR/USD with a contract size of 100,000 units, one pip (0.0001) is worth 100,000 × 0.0001 = $10 per lot. With a 20-pip stop, 1 lot loses 20 × $10 = $200. So you trade $100 ÷ $200 = 0.50 lots.
If the specification shows a tick size of 0.00001 and a tick value of $1, a 20-pip stop is 200 ticks: 200 × $1 = $200, the same answer. The common misread is to multiply 20 pips by the $1 tick value. That gives $20 instead of $200, and you size the trade 10 times too big.
Now gold. Say this broker's specification shows a contract size of 100 ounces, and your stop is $5 away from your entry. With a tick size of 0.01, that is 500 ticks, and at a tick value of $1 per lot, 500 × $1 = $500. The calculation below shows the size.
Suppose you skipped the specification and assumed 1 lot was 10 ounces, as it might be somewhere else. You would work out $100 ÷ ($5 × 10) = 2.00 lots. At the real contract size, 2 lots lose 2 × $500 = $1,000 at the stop. That is ten times the risk you planned, as the chart below shows.
Checks before you place the first trade on a symbol
Open the symbol's details from the watchlist or instrument list on your trading platform. If those values differ from the broker's website, trust what your trading platform shows on your live account, because that is what your orders use. You can read these values but not change them; you control your lot size, your stop distance and how long you hold.
- Compare contract size and tick value with the last broker or account you used. Never carry a lot size over from another instrument.
- Redo the sizing maths using the tick value shown, not a pip value you remember.
- Round down to the volume step. If the step is 0.01 and your maths gives 0.237, trade 0.23.
- Check the minimum stop distance. If your stop is closer than the minimum, the order is rejected or you have to move the stop.
- Add swap to your risk if you hold. If the swap on your side is a charge and you plan to hold several nights, add swap × nights × lots to your planned risk. Some brokers charge several days at once on one weekday's rollover, so check which day yours uses.
- Note the trading sessions. If the symbol closes before a weekend or holiday, decide whether you will exit before the close or accept a gap.
- Estimate the margin before you click. A common formula is margin = lots × contract size × price ÷ leverage, though your platform may also apply the margin rate. In the EUR/USD example at a price of 1.1000 and 1:100 leverage: 0.50 × 100,000 × 1.1000 ÷ 100 = $550.
FAQ
Can my broker change the contract specification while I have a trade open?
Yes. Brokers can update fields such as margin rates, swaps and trading hours, often around holidays or volatile events. Read broker notices, and check the specification again before you hold through those periods.
Can my live account have a different contract size or margin than my demo?
Yes. Account types and servers can carry different specifications. Open the specification on your live account and redo your sizing before you trade real money.
Why is the swap shown in points instead of money?
Brokers can quote swaps in points, in money or as a percentage of the position value; the specification says which. To turn points into money, multiply points × tick value × lots. With the $1 tick value from the EUR/USD example, a swap of -5 points costs 5 × $1 × 1 = $5 per lot per night.