Odd Lot Theory

DEFINITION of 'Odd Lot Theory'

A technical analysis theory/indicator based on the assumption that the small individual investor is always wrong. Therefore, if odd lot sales are up - that is small investors are selling stock - it is probably a good time to buy.

BREAKING DOWN 'Odd Lot Theory'

This approach assumes small investors have a low risk tolerance and tend not to hold a stock for the long-term.

RELATED TERMS
  1. Odd Lot

    An order amount for a security that is less than the normal unit ...
  2. Odd Lotter

    An individual investor who buys securities, usually stocks, in ...
  3. Retail Investor

    Individual investors who buy and sell securities for their personal ...
  4. Mixed Lot

    A type of order for a number of securities that is not a round ...
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    A group of 100 shares of a stock, or any group of shares that ...
  6. Even Lot

    A normal unit of trading for securities or bonds. An even lot ...
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