Trade size

The quantity dealt, stated in the unit the instrument uses: lots for a currency pair or a commodity contract, a money amount per point for many index contracts, a number of shares for a share contract. Multiplied by the contract size and by the price, it gives the notional value, which is the full value of the exposure. Profit and loss are calculated on that full value, and a loss is therefore measured against the whole contract, can exhaust the collateral posted against it entirely, and is not limited to the amount deposited. A favourable movement is measured on exactly the same basis and to exactly the same degree.

Size is the one input in a position that is settled entirely before anything happens. The price is not known in advance and the outcome is not either, but the quantity is chosen, and everything downstream scales with it: the value of each increment, the collateral the counterparty requires as a percentage of the notional value, the effect of any single movement on account equity. This is why size is conventionally described as the primary lever in risk work, and why methods for setting it are a subject in their own right.

The trip is comparing volumes across instruments. A stated volume of one is a different exposure in every market, because the contract size behind it differs, so two positions entered at the same number are not comparable until both are expressed as notional value or as money per increment. A second trap sits in the platform default: the volume field opens at a preset quantity that has no relation to any particular account, and it is a field rather than a recommendation.