Odd Lot Theory

Dictionary Says

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.

Investopedia Says

Investopedia explains 'Odd Lot Theory'


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

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