Definition of odd lot
: a number or quantity other than the usual unit in transactions; especially : a quantity of less than 100 shares of stock
First Known Use of odd lot
Financial Definition of ODD LOT
What It Is
How It Works
Investors, particularly individuals, are frequently unable or unwilling to bear the expense of trading shares in even round lots. Nearly all brokers accept odd-lot trades, but some may charge a higher commission for doing so. However, the advent of electronic and online trading platforms has reduced, and in some cases eliminated, these odd-lot premiums.
Why It Matters
Odd-lot orders tend to be placed by small personal investors rather than institutional traders. Thus, the ratio of odd-lot buying to odd-lot selling is often used to evaluate small-investor sentiment. Trends in odd-lot short sales may also be indicative of negative sentiment by small investors.
Legal Definition of odd lot
: a quantity of stock that is less than the usual rounded amount (as 100 shares) — compare round lot
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