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. Odd Lot

    An order amount for a security that is less than the normal unit ...
  2. Iceberg Order

    A large single order that has been divided into smaller lots, ...
  3. Lot

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

    A group of 100 shares of a stock, or any group of shares that ...
  5. Block Trade

    An order or trade submitted for sale or purchase of a large quantity ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value ...
Related Articles
  1. Investing

    How much more will it cost me to buy an odd lot of shares?

    A round lot is a predetermined number of shares of stock - usually 100 shares, while an odd lot refers to any number of shares that is not evenly divisible by 100 (usually less than 100).Odd ...
  2. Forex Education

    Top 10 Forex Trading Rules

    These rules will help keep you grounded - and out of harm's way.
  3. Options & Futures

    Brokers and Online Trading

    How do you find the right broker for your investment needs? Start by reading our broker tutorial.
  4. Forex Education

    What's the difference between bid-ask spread and bid-ask bounce?

    Understand the difference between the bid-ask spread that determines the buy or sell price for a stock and a bid-ask bounce, a situational price volatility.
  5. Options & Futures

    How do you trade put options on E*TRADE?

    Learn all about put option trading at E*TRADE. Explore margin accounts and become familiar with the different types of option writing.
  6. Options & Futures

    Do you have to be an expert investor to trade put options?

    Learn about investing in put options and the associated risks. Explore how options can provide risk, which is precisely defined to predetermined limits.
  7. Options & Futures

    Are put options more difficult to trade than call options?

    Learn about the difficulty of trading both call and put options. Explore how put options earn profits with underlying assets fall in value.
  8. Mutual Funds & ETFs

    How do hedge funds use short selling?

    Learn how hedge funds use short selling to profit from stocks that are falling in price. Explore different analytical techniques hedge funds employ to find investments.
  9. Options & Futures

    Is short selling a form of insurance?

    Explore short selling and put options. Learn how put options may be used as insurance to protect positions, and costs associated with using this method.
  10. Investing Basics

    How long can a trader keep a short position?

    Learn whether there are any limitations on how long may an investor hold a short position, and explore the costs associated with short selling.

You May Also Like

Hot Definitions
  1. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  2. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  3. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  4. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  5. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  6. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
Trading Center