Lot
 |
Definition of 'Lot'In general, any group of goods or services making up a transaction. In the financial markets, a lot represents the standardized quantity of a financial instrument as set out by an exchange or similar regulatory body. For exchange-traded securities, a lot may represent the minimum quantity of that security that may be traded. |
 |
Investopedia explains 'Lot'In terms of stocks, the lot is the number of shares you purchase in one transaction. In terms of options, a lot represents the number of contracts contained in one derivative security.The concept of lots allows the financial markets to standardize price quotes. For example, equity options are priced such that each contract (or lot) represents exercise rights for 100 underlying shares of common stock. With such standardization, investors always know exactly how many units they are buying with each contract and can easily assess what price per unit they are paying. Without such standardization, valuing and trading options would be needlessly cumbersome and time consuming. |
Related Definitions
Articles Of Interest
-
Using Tax Lots: A Way To Minimize Taxes
The method of identifying cost basis can help you to get the most out of reduced tax rates. -
Forex Trading The Martingale Way
The Martingale system boasts a 100% success rate, if you have the money. Find out if this is the right strategy for you. -
The Nitty-Gritty Of Executing A Trade
Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out! -
Break Out Of Your Comfort Zone And Win
Fear of breaking out of a comfort zone can prevent an investor from reaching his or her full potential. -
How does leverage affect pip value?
A standard forex account has specific lots and pip units. A lot is the minimum quantity of a security that may be traded, while a pip is the smallest amount by which a currency quote can change. ... -
What's the smallest number of shares I can buy?
Unlike mutual funds, which can be purchased in fractional units, shares of stock cannot be divided. So, the smallest number of shares an investor can buy is one share. There is a catch that could ... -
Making It Big On Wall Street
Read about some of the most glamorous Wall Street jobs and what it takes to land one. -
Quants: The Rocket Scientists Of Wall Street
Blend math, finance and computer skills to command a high - and well deserved - salary. -
Build A Baby Berkshire
Get a piece of Warren Buffett's profit by using Form 13F to coattail his picks. -
Cash: A Call Option With No Expiration Date
Cash is generally regarded as a drag on investment returns, but sometimes it may be preferable to hold a substantial cash amount instead of investing it in other assets. This is because having ...
Free Annual Reports
