Glossary
Lot
A quantity of shares bought at one time and price; a round lot is 100 shares, and tax lots track each purchase's cost basis.
A lot is a batch of a security, and the word is used in two everyday senses. In trading, it is a standard order size: a round lot of US stock is traditionally 100 shares, and anything smaller is an odd lot. In accounting and taxes, a tax lot is each separate purchase you make, with its own date and price. When you sell part of a holding, which tax lot you sell decides the size of your gain or loss.
Tax lots and the method you choose
If you buy the same stock several times, your broker records each purchase as its own lot. On a sale, the default method at most US brokers is first in, first out (FIFO), but you can usually choose specific identification before the trade settles and name the lots to sell.
Mutual fund shares may also use an average-cost method. Whatever method applies, the wash-sale rule can change the basis of a lot if you buy back within 30 days of selling at a loss.
Lot sizes in other markets
Other markets have their own standard units. In spot forex a standard lot is 100,000 units of the base currency, with mini (10,000) and micro (1,000) lots. Options trade in contracts that usually cover 100 shares. Exchanges outside the US often set board lots that vary by share price.