What is lot size in options trading?

Lot size is the minimum number of units of the underlying asset that one options or futures contract represents, and it’s fixed by the exchange for each specific stock or index, not something you can adjust or trade in smaller fractions of. For example, if Nifty’s lot size is 75 units (exchange-set lot sizes do get revised periodically, so you always check the current value rather than an old number), then buying one Nifty options contract means you’re trading exposure equivalent to 75 units of the index, not one unit. You can trade in multiples of the lot size (1 lot, 2 lots, 5 lots) but never in a fraction of a lot. Lot sizes vary significantly across different stocks and indices, generally set so that one lot’s total contract value falls within a range SEBI and the exchange consider appropriate, and they’re periodically revised as stock prices change over time, so you always confirm the current lot size for a specific contract before calculating your required margin or position size.