Odd Lot Theory

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DEFINITION

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.

INVESTOPEDIA EXPLAINS

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


RELATED TERMS
  1. Lot

    In general, any group of goods or services making up a transaction. In the financial ...
  2. Odd Lot

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    A type of order for a number of securities that is not a round (or whole) lot ...
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