odd lot

noun
Updated on: 13 Oct 2017

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

Recent Examples of odd lot from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'odd lot.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of odd lot

1858


Financial Definition of ODD LOT

odd lot

What It Is

An odd lot is an order for anything less than 100 shares. This is the opposite of a "round lot," which are orders in multiples of 100 shares. However, thinly traded stocks sometimes trade in 10-share increments.

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.

The controversial odd-lot theory states that odd-lot traders are poor market timers and that profits can therefore be made by trading contrary to odd-lot trading patterns.


Law Dictionary

odd-lot

adjective

legal Definition of odd-lot

: of, relating to, or being the type of worker considered under the odd-lot doctrine
  • an odd-lot worker without stable employment

odd lot

noun

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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