Bunching

AAA

DEFINITION of 'Bunching'

The combining of odd-lot or round-lot orders for the same security so that they can be executed at the same time. Bunching occurs when traders and brokers combine small or unusually-sized trade orders into one larger order. If an order is bunched, all affected clients must agree to the bunching before the order is submitted.

INVESTOPEDIA EXPLAINS 'Bunching'

Bunching can be financially advantageous for investors with orders for less than 100 shares of a particular security, who would otherwise be charged extra fees for the odd-lot order, sometimes called an odd-lot differential. Odd-lot orders are difficult to match, and additional fees are common. Often, bunching occurs on the floor of an exchange when multiple round-lot orders or odd-lot orders are combined into one trade execution.

The term bunching also refers to a pattern that appears on a ticker tape when a series of same-security trades print one after the other.

RELATED TERMS
  1. Iceberg Order

    A large single order that has been divided into smaller lots, ...
  2. Block Trade

    An order or trade submitted for sale or purchase of a large quantity ...
  3. Lot

    In general, any group of goods or services making up a transaction. ...
  4. Odd Lot

    An order amount for a security that is less than the normal unit ...
  5. Round Lot

    A group of 100 shares of a stock, or any group of shares that ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value ...
Related Articles
  1. How much more will it cost me to buy ...
    Investing

    How much more will it cost me to buy ...

  2. Top 10 Forex Trading Rules
    Forex Education

    Top 10 Forex Trading Rules

  3. Brokers and Online Trading
    Options & Futures

    Brokers and Online Trading

  4. Alibaba's Top Competitors
    Investing News

    Alibaba's Top Competitors

Hot Definitions
  1. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  2. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  3. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center