What is a Lot in Securities Trading?

In the financial markets, a lot represents the standardized number of units of a financial instrument as set out by an exchange or similar regulatory body. The number of units is determined by the lot size. In the stock market, most stocks trade in a lot size of 100 shares, although some higher priced stocks may trade in lots of 10 shares. Each market has its own lot size.



Understanding the Lot in Securities Trading

When investors and traders purchase and sell financial instruments in the capital markets, they do so with lots. A lot is a fixed quantity of units and depends on the financial security traded.

For stocks, the typical lot size is 100 shares. This is known as a round lot. A round lot can also refer to a number of shares that can evenly be divided by 100, such as 300, 1,200, and 15,500 shares.

Customers can still place orders in odd lots, which is an order less than 100 shares. An order for 35 shares is an odd lot, while an order for 535 shares has five round lots and one odd lot for 35 shares.

Similar to stocks, the round lot for exchange-traded securities, such as an exchange-traded fund (ETF), is 100 shares.

Key Takeaways

  • A lot is the standardized number of units in which a financial instrument trades.
  • Shares trade in 100 share units, called round lots, but can also be traded in odd lots.
  • Bonds can be sold in lots of $10,000 or higher, although face values may be as low as $1,000 which individual investors can purchase.
  • A trader can buy or sell as many futures as they like, although the underlying amount that contract controls is fixed based on the contract size.
  • One option represents 100 shares of the underlying stock.
  • Forex is traded in micro, mini, and standard lots.


The bond market is dominated by institutional investors who buy debt from bond issuers in large sums. The standard trading unit or lot for a US government bond is $1 million. The municipal bond market has a smaller lot per trade at $100,000. Other bonds may trade in increments of $10,000.

That doesn't mean a trader or investors needs to buy bonds in that quantity. Bonds typically have a face value of $1,000 to $10,000 (some are even lower). An investor can buy as many bonds as they like, yet it still may be an odd lot.


In terms of options, a lot represents the number of contracts contained in one derivative security. One equity option contract represents 100 underlying shares of a company’s stock. In other words, the lot for one options contract is 100 shares.

For example, an options trader purchased one Bank of America (BAC) call option last month. The option has a strike price of $24.50 and expires this month. If the options holder exercises his call option today when the underlying stock, BAC, is trading at $26.15, he can purchase 100 shares of BAC at the strike price of $24.50. One option contract gives him the right to purchase the lot of 100 shares at the agreed strike price.

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.

The smallest options trade a trader can make is for one contract, and that represents 100 shares. Therefore, it is not possible to trade options for a smaller amount than 100 shares unless the underlying security trades in a smaller lot (extremely rare).


When it comes to the futures market, lots are known as contract sizes. The underlying asset of one futures contract could be an equity, a bond, interest rates, commodity, index, currency, and so on. Therefore, the contract size varies depending on the type of contract that is traded. For example, one futures contract for corn, soybeans, wheat, or oats has a lot size of 5,000 bushels of the commodity. The lot unit for one Canadian dollar futures contract is 100,000 CAD, one British pound contract is 62,500 GBP, one Japanese yen contract is 12,500,00 JPY, and one Euro futures contract is 125,000 EUR.

Unlike stocks, bonds, and ETFs in which odd lots can be purchased, the standard contract sizes for options and futures are fixed and non-negotiable. However, derivatives traders purchasing and selling forward contracts can customize the contract or lot size of these contracts, since forwards are non-standardized contracts that are created by the parties involved.

Standardized lots are set by the exchange and allow for greater liquidity in the financial markets. With increased liquidity comes reduced spreads, creating an efficient process for all participants involved.

Forex Lots

When trading currencies, there are micro, mini, and standard lots. A micro lot is 1,000 of the base currency, a mini lot is 10,000, and a standard lot is 100,000. While it is possible to exchange currencies at a bank or currency exchange in amounts less than 1,000, when trading through a forex broker typically the smallest trade size is 1,000 unless expressed stated otherwise.

Examples of a Lot in Trading

In the options and futures markets, trading in lots isn't as much of a concern since you can trade any number of contracts desired. Each stock option will represent 100 shares, and each futures contract controls the contract size of the underlying asset.

In forex, a person can trade a minimum of 1,000 of the base currency, in any increment of 1,000. For example, they could trade 1,451,000. That is 14 standard lots, five mini lots, and one micro lot.

In a stock trade, a person can trade in odd lots of less than 100 shares, but odd lot orders less than 100 shares won't be shown on the bid or ask unless the odd lots total more than a round lot.

Assume that a stock has a bid of $50.10 and an offer of $50.35. These are the bid and offer because there are at least 100 shares being bid and offered at those levels. If a trader were to place an order for 50 shares at $50.20, the bid would still stay at $50.10 and the 50 share order at $50.20 wouldn't be visible on the level II to most traders. The reason is that the order is not for a round lot. Round lots change the price while odd lots do not.

Assume another trader decides to also place a 70 share order at $50.20. There are now more than 100 shares being bid at $50.20, so the bid will increase to $50.20.