What Is Notional Value

Three amounts of money

Three amounts of money go with every trade, and they are very different sizes. The notional value is what the trade is worth in full: the lots, times the contract size, times the price. One lot of the euro against the dollar is 100,000 euros, and at the open of 3 September 2026, 1.15872, that is $115,872. The account the trade was made from held $5,000. The margin the broker held back at one-to-one-hundred — one hundredth of the notional — was $1,159. The trade is exposed to the first number, not the second or the third.

Notional times the move

The reason the notional matters is that a move in the price is a share of it. On 3 September the euro rose 38.7 pips, from 1.15872 to 1.16259 — a pip is the fourth decimal place — which is 0.334 per cent of the price. On a notional of $115,872 that is $387. The account only comes into it afterwards: $387 on $5,000 is 7.7 per cent, twenty-three times the size of the move, because the notional was twenty-three times the account. The price moved by a third of one per cent; the account moved by nearly eight.

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