Lot Size
Also called: lot size, market lot, contract size, units per lot, lot.
How it is read
Lot size is read alongside the quoted premium, not instead of it. So the gross premium for one contract is the quoted premium times the units per lot. That is before any charges. Exchanges revise lot sizes from time to time. A revision usually applies from a stated contract or expiry onward. It does not usually apply at once. So during a changeover, different expiries of the same underlying can carry different quantities. What matters is the current units per lot, and the date they apply from. A figure remembered from an earlier series is not enough.
What it does not tell you
Lot size is not margin. It is not a profit multiplier for the underlying's move either. It fixes quantity only. The margin a broker requires is a separate calculation. It is driven by the product, the side and the risk rules that apply. An option's profit or loss follows the change in premium. That does not track the underlying point-for-point. A lot size published for one instrument does not carry across to another. Nor does it carry back to a past contract.
See it in an experiment
Contract basics — What does one option contract contain?
Related concepts
What is a lot size?
Lot size is the number of units in a derivatives contract. One lot's premium is the quote multiplied by the lot size, before charges. The exchange can revise lot sizes. The figure tells you quantity, not margin or future profit.
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