Investing in stocks is gaining more popularity, and for beginners, some terms can be confusing, such as the number of shares in one “lot” for each transaction. When buying stocks, investors are required to specify the number of shares they wish to purchase in units. The price per unit is displayed during the transaction.

However, it’s important to understand that shares are not bought individually; instead, they are traded in “lots.” In most markets, a standard lot consists of a specific number of shares. For example, in the Indonesian stock market, one lot is equal to 100 shares. This means any purchase or sale of stocks must be in multiples of 100.

Understanding the concept of “lots” helps new investors get accustomed to how stock trading operates and enables them to calculate the total cost of their investments accurately.

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What is a Stock Lot? and How Many Shares are in 1 Lot?

Basically, “lot” or “round lot” is a standard unit used to refer to the nominal amount of money in stock trading in the capital market. Therefore, all stock trading transactions must be carried out in lots or multiples thereof.

 

Changes in the Number of Shares per Lot

Before 2014, the Indonesia Stock Exchange (IDX) stipulated that one lot consisted of 500 shares. However, according to the latest policy, the number of shares in one lot has been reduced to 100.

Although the standard share count per lot is uniform across all companies, the price per lot can still vary significantly. For instance, some companies may have a lot priced as high as IDR 1,500,000,000, with each share valued at IDR 15,000,000. On the other hand, other companies may have a lot priced at only IDR 150,000, with each share costing IDR 1,500.

Once shares are issued by a company through an Initial Public Offering (IPO), the price per lot is determined by investor demand in the market. Consequently, there can be significant price fluctuations, such as a rise from IDR 5,000,000 to IDR 15,000,000 for one lot within just one week.

Purpose of Setting Lot Standards by the Stock Exchange

Many new investors often wonder why stock purchases are required to be made in lots, even though ownership is calculated per share. The IDX established the standard of 100 shares per lot for several reasons

 

Maintaining an Ideal Nominal Value for Stock Transactions

The main purpose is to ensure that the transaction size remains practical and manageable for issuers, underwriters, and investors. Allowing purchases on a per-share basis would lead to numerous low-value transactions, which would be inefficient.

 

Facilitating Faster Capital Acquisition for Companies

By setting a standard lot size, the stock exchange helps companies raise large amounts of capital more efficiently. Without a minimum lot requirement, the process of selling shares would take longer.

Simplifying Profit Calculations

The standard lot size helps investors calculate profits more easily, whether from dividends or yield. For example, if the price of a share in Company ABC rises from IDR 865 to IDR 1,125, the profit per share is IDR 260. However, when calculated by lot, the investment profit would be IDR 260,000 per lot, given a capital of IDR 865,000.

 

Encouraging Public Investment

 

Ultimately, the determination of one lot of shares aims to attract more people to invest.

As explained earlier, the calculation of profit per share is not that significant. On the contrary, the calculation of profit per lot is more interesting because the number is much larger.

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Stock Lot Multiples: What Does It Mean for Investors?

Stock lot multiples refer to the purchase of shares in standard units, allowing investors to accumulate a certain number of shares at once, with the price per lot varying depending on the company issuing the shares.

Buying Stocks in Multiple Lots

Investors have the option to buy stocks in multiple lots. For example, if one lot consists of 100 shares, then buying 5 lots means you will have 500 shares. Thus, buying in multiple lots allows investors to manage a larger investment amount more efficiently.

Different Prices for Each Lot

The price per lot can vary between companies, depending on the price per share and the number of shares purchased. For example, if the price of one share of a company is Rp1,000, then the price of one lot (100 shares) becomes Rp100,000.

However, other companies with higher prices per share can make the price per lot much more expensive. Thus, it is important for investors to pay attention to stock prices and make comparisons before deciding to buy in multiple lots.

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Example of Stock Lot Calculation

The following is an example of calculating stock lots based on stock sheets and multiple lots that are important to know.

Price Calculation Based on Shares

For example, if the price per share is set at IDR1,500, then an investor who wants to buy 1 lot, consisting of 100 shares, will pay a total of IDR150,000.

 

Example of Multiple Lot Calculation

The next example is when an investor chooses to buy 5 lots of shares at a price of IDR1,000 per share. In this case, the total to be paid is IDR500,000.

Purchasing in multiple lots not only simplifies the transaction process, but also allows investors to invest in more significant amounts, maximizing potential profits in the stock market.

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Why Do Investors Need to Understand the Concept of Stock Lots?

Basically, it is important for investors to understand the concept of stock lots. Here are some reasons behind it.

Understanding Liquidity and Ease of Investment

Understanding the number of sheets per lot is very important for investors because this change can increase liquidity in the stock market.

By setting a smaller lot, more investors, especially those with small capital, can participate in stock trading.

It facilitates access to the market, allowing them to buy and sell stocks more quickly and efficiently.

Increased liquidity also has a positive impact on price stability, which in turn provides more confidence for investors to engage in trading activities.

Determining the Right Investment Strategy

Understanding the number of sheets per lot also plays an important role in determining an investment strategy that suits the capital and financial goals of each investor.

By knowing how many shares are in one lot, investors can plan purchases that are in line with their budget and investment goals.

For example, if an investor has limited capital then they may prefer to buy several small lots rather than one large lot. This allows them to diversify their portfolio and manage risk better.

Conclusion

In summary, the discussion about “How Many Shares are in 1 Lot? A Stock Guide for Beginners,” which can be read in full at the INDODAX Academy, explains that one lot of shares is a standard unit used in stock trading, typically consisting of 100 shares.

The change in regulations by the Indonesia Stock Exchange (IDX), which set a smaller number of shares per lot, has significantly impacted investors, especially smaller investors, by increasing accessibility and liquidity in the stock market.

Understanding the concept of stock lots is crucial because it helps investors learn how to invest efficiently and plan strategies that align with their capital and financial goals. By grasping this concept, the investment process becomes more straightforward and potentially more profitable for all types of investors.

FAQ

What is a Stock Lot?
A stock lot is a standard unit in stock trading on the stock market, consisting of 100 shares.

How many shares are in 1 lot?
Since 2014, 1 lot of stock in Indonesia consists of 100 shares.

Why does 1 lot consist of 100 shares?
This change was made to increase liquidity and make it easier for smaller investors to access the stock market.

Can I buy less than 1 lot?
No, the minimum purchase for stocks is 1 lot, which consists of 100 shares.

How do I calculate the price of 1 lot of stock?
The price of 1 lot of stock is calculated by multiplying the price per share by 100.