Lot size is the minimum number of units (shares or contracts) that must be traded in a single transaction for futures and options contracts. It's standardized by the exchange to ensure liquidity and orderly trading. For example, if NIFTY has a lot size of 50, you must trade in multiples of 50 contracts.

Lot size is crucial because it determines your position size and capital requirement. It helps calculate the total contract value, margin requirements, and potential profit or loss. Understanding lot size is essential for proper position sizing and risk management in derivatives trading.

Position size = Lot Size × Number of Lots × Contract Value. For example, if you want to trade 2 lots of NIFTY (lot size 50) at ₹20,000, your position size would be 2 × 50 × 20,000 = ₹20,00,000. Lot size directly impacts your capital requirement and exposure to market movements.

Yes, exchanges can revise lot sizes periodically based on market conditions, stock splits, bonus issues, or to maintain liquidity. When lot sizes change, existing positions are adjusted accordingly. It's important to stay updated with the latest lot size information before placing trades.

Index futures typically have larger lot sizes (e.g., NIFTY 50, BANKNIFTY 15) compared to individual stock futures. Stock lot sizes vary based on the stock's price and liquidity. Indices are more standardized, while stock lot sizes are adjusted to keep contract values within a reasonable range for retail traders.