Lot size is a fixed quantity, set by the exchange, that one Futures or Options contract represents. You cannot trade a custom or arbitrary quantity — you trade in multiples of the lot size, and it varies by underlying asset.
Why It Matters
Lot size directly affects your profit/loss calculation: Profit/Loss = (price difference) × lot size. It also affects the total margin required, since larger lot sizes mean larger notional exposure.
Related Reading
See a full worked profit/loss example using lot size in What Is a Futures Contract? A Complete Beginner’s Guide.