What is a Lot?
A lot in the financial markets is the number of units of a financial instrument. The number of units is determined by the lot size. Each lot size differs depending on the asset class of the financial instrument.
Stocks – 1 Lot = 100 Shares
Options – 1 Lot = 10 shares of underlying stock
Forex – 1 Lot = 100,000 units of the base currency
When traders and investors purchase and sell financial instruments in the financial markets, they are trading lots in some form or other depending on the asset class.