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Lot Size

Standardized quantity of an asset or contract unit used to define trade size in futures, FX, or derivatives markets.

Lot size refers to the standardized quantity of an asset represented by a single contract or trade unit. In oil futures, lot sizes define the volume of crude or products per contract.

Standardization enables liquidity and comparability across trades. For example, a WTI futures contract represents 1,000 barrels of crude oil, allowing traders to scale exposure precisely.

Lot size also affects risk management. Larger lots increase exposure per contract, influencing margin requirements and position limits. Smaller lots may offer flexibility but lower liquidity.

Understanding lot size is essential for accurate position sizing, hedging, and risk calculation in oil markets.

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