Bunching
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. |
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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. |
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