Quotation Lot refers to the minimum number of shares or units of a security that must be traded in a single transaction on the stock exchange. It helps maintain uniformity and liquidity in the market by standardizing trade sizes. The concept is crucial for both retail and institutional investors to understand, as it determines how securities are bought and sold on the exchange.

In India, stock exchanges like the NSE and BSE define quotation lots based on the price and liquidity of each security. For example, highly liquid stocks may have a smaller quotation lot size, while less liquid or high-priced stocks may have larger lot sizes to ensure smoother price discovery and market efficiency. The Securities and Exchange Board of India (SEBI) periodically reviews and revises these lot sizes to align with market dynamics.

Investors must note that a quotation lot differs from a market lot. While both determine tradeable quantities, a market lot refers to the number of shares deliverable in a settlement, whereas a quotation lot is the unit used for quoting prices on the exchange. For instance, if the quotation lot of a stock is 10, the price displayed on the exchange represents 10 shares, not one.

Understanding quotation lots is vital for accurate order placement and investment planning. It helps investors avoid errors in trade size, ensures compliance with exchange norms, and facilitates efficient participation in the equity and derivatives markets. Staying informed about updates in lot sizes through official exchange notifications helps traders make well-informed decisions aligned with regulatory standards.