Odd Lot
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Definition of 'Odd Lot'An order amount for a security that is less than the normal unit of trading for that particular asset. Odd lots are considered to be anything less than the standard 100 shares for stocks. Trading commissions for odd lots are generally higher on a percentage basis than those for standard lots, since most brokerage firms have a fixed minimum commission level for undertaking such transactions. |
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Investopedia explains 'Odd Lot'Odd lots may inadvertently arise in an investor's portfolio through reverse splits or dividend reinvestment plans. For example, a 1-for-8 reverse split of a security, of which the investor holds 200 shares, will result in a post-split amount of 25 shares.While trading commissions for odd lots may still be higher than for standard lots on a percentage basis, the popularity of online trading platforms and the consequent plunge in brokerage commissions means that it is no longer as difficult or expensive for investors to dispose of odd lots as it used to be in the past. |
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