Definition
A round lot is 100 shares of stock, the traditional standard unit for trading. Orders in round lots historically received better execution and appeared on the consolidated tape. While the distinction matters less in modern markets, institutional traders still often trade in round lots or multiples thereof.
Example
An investor buys 500 shares of Microsoft - this is 5 round lots, a standard institutional order size.
FAQ
What is Round Lot?
A standard trading unit of 100 shares.
Why is Round Lot important?
Round Lot helps investors evaluate trading mechanics and make more informed decisions.