Lot Size

The standardized quantity of units in a single transaction. In U.S. equity markets, a standard lot is 100 shares, and options contracts represent 100 shares each. In forex, a standard lot is 100,000 units of the base currency, while mini lots (10,000) and micro lots (1,000) allow smaller traders to participate. Lot sizing is a critical component of position sizing and risk management -- trading too large a lot relative to account size is one of the fastest paths to a blown account.