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Lot Size

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When we are trading in the cash market, we can trade in multiple of 1 shares.. So one can buy 5 shares or 10 shares or 100 shares.

But, when we are trading in derivatives market, we buy in lots..

One lot comprises several hundred shares or units of the underlying security.

For example, if 1 Nifty lot size is 75, we are buying 75 shares of Nifty (as example)..

So, buying 10 lots means, you are buying 10 x 75 = 750 shares as a single transaction.

So, quantity in F&O Segment (Equities / Commodities / Currencies) will be in terms of lots.

The concept of lots is put for easy liquidity and decent packet size for trading.

Market regulators set the lot size and periodically change it to be affordable and meaningful for traders.

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