Glossary
What is Lot Size? Meaning, Example & Why It Matters
The fixed number of units of the underlying asset in one futures or options contract, set by the exchange.
Lot size is the minimum quantity you can trade in a futures or options contract. Instead of buying any number of shares, derivatives trade in standard lots, for example a certain number of units of an index or stock per contract. You can trade one lot or multiples of it, but not a fraction.
Why Lot Size matters to you
Lot sizes determine how much money is at stake per contract. The exchanges set them based on SEBI guidelines on minimum contract value, and they are revised periodically, especially when prices change a lot. SEBI has increased minimum contract sizes in the past to reduce excessive retail participation in derivatives.
Because lot sizes change, do not rely on a lot size you saw in a video or article. Before every trade, check the current lot size on the exchange website or your broker's order window. A change in lot size directly changes your margin requirement and profit or loss per point move.
Practical tip: calculate profit or loss per point by multiplying the lot size by the price move. Knowing this number before placing an order helps you size positions to a level of loss you can actually tolerate.
Example: Illustrative only: if a contract had a lot size of 100 units and the price moved by ₹10, your gain or loss per lot would be ₹1,000. Check the current lot size, as these numbers are just for illustration.
See it in rupees: every charge and tax on a real trade, at every broker. Open the brokerage calculator
Related terms
- GlossaryF&O (Futures and Options)
The derivatives segment where traders buy and sell futures and options contracts based on stocks or indices.
- GlossaryFutures
A contract to buy or sell an asset at a fixed price on a future date, traded in standard lot sizes.
- GlossaryOptions
A contract giving the buyer the right, but not the obligation, to buy or sell an asset at a set price before expiry.
- GlossaryMargin
The money or collateral you must keep with your broker to take and hold leveraged positions.
Frequently asked questions
Can I trade less than one lot?
No, futures and options on Indian exchanges must be traded in whole lots.
Why do lot sizes change?
Exchanges revise lot sizes periodically to keep contract values within SEBI's prescribed range as prices change.
Where can I find the current lot size?
On the NSE or BSE website and in your broker's order window, which should reflect the latest exchange circular.