Why does one option order cover more than one unit?
What does one lot contain?
Lot size is the number of units in one derivatives contract. The exchange sets it separately for each index or stock.
Why can the quote look small?
An option's price is its premium. Multiply the quoted premium by the lot size to get the amount for one lot, before charges.
Does a lot size stay fixed?
No. The exchange can change it. After a change, new contracts use the new size. Older contracts can keep the old size until they end.
How does one quoted premium become an amount?
A NIFTY option quotes ₹100. A NIFTY lot has 65 units. One lot's premium is ₹6,500 before charges.
What this does not establish
Lot size fixes quantity. It does not tell you the required margin or future profit.
In short
- The quote is the option's premium.
- Multiply by the current lot size to get one lot's premium before charges.
An option's premium is quoted. What is one lot's premium before charges?
- The quoted premium multiplied by the current lot size
- The quoted premium alone, regardless of lot size
- The current lot size alone, regardless of premium
Show the answer
A. The quoted premium multiplied by the current lot size
Lot size counts units in one contract. Multiply the quoted premium by those units. Charges are separate.