Odd Lot

AAA

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.

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.

RELATED TERMS
  1. Block Trade

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

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

    A technical analysis theory/indicator based on the assumption ...
  4. Round Lot

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

    The combining of odd-lot or round-lot orders for the same security ...
  6. Mixed Lot

    A type of order for a number of securities that is not a round ...
Related Articles
  1. How much more will it cost me to buy ...
    Investing

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

  2. Start Investing With Only $1,000
    Investing Basics

    Start Investing With Only $1,000

  3. Forex Basics: Setting Up An Account
    Forex Education

    Forex Basics: Setting Up An Account

  4. 4 Common Active Trading Strategies
    Trading Strategies

    4 Common Active Trading Strategies

Hot Definitions
  1. 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 ...
  2. Debit Spread

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

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

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center