A Round Lot is a term used in the stock market to refer to a standard unit of trading. In the case of stocks, a round lot typically refers to a trade of 100 shares of a stock. This is in contrast to a "odd lot," which is a trade of less than 100 shares.The concept of a round lot is based on the fact that stocks were historically traded in blocks of 100 shares. This made it easy for traders to calculate the value of a trade and for stockbrokers to keep track of the trades they executed on behalf of their clients. As the markets have evolved and technology improved, the concept of a round lot has become less relevant, but it is still widely used.Round lot trading is still important to institutional investors since they typically trade in large quantities, whereas a retail investor would trade on a much smaller scale.Additionally, Many online brokers and trading platforms have introduced fractional shares trading, which allows traders to buy and sell a fraction of a share, rather than being forced to trade in round lots of 100 shares. This has made it possible for individuals with smaller amounts of capital to invest in the stock market.It's worth noting that round lot is also used for other securities like options, Futures or currencies. The size of round lot may vary depending on the security and the exchange.
