Odd Lot

What Is an Odd Lot?

An odd lot is a quantity of shares smaller than a round lot. For most U.S. common stocks, a round lot is 100 shares, so any order or holding of fewer than 100 shares is an odd lot. A position of 250 shares is generally described as two round lots plus an odd lot of 50 shares.

Odd lots are common in everyday investing. They often result from buying modest amounts of stock, from selling part of a position, or from fractional shares created by stock splits, dividend reinvestment, or other corporate actions.

How Odd Lots Are Handled

Historically, the market has treated odd-lot trades differently from round-lot trades. Odd-lot orders have sometimes been routed and executed through separate processes, and brokers have not always charged for them in the same way. Because these practices and the rules around them have changed over time, the details depend on the market, the broker, and the period in question.

Small orders can also be affected by the bid-ask spread. Per-share price differences that seem minor on a large order can matter more on a small one, and fixed per-trade costs can represent a larger share of the transaction's value. Investors trading odd lots may also notice that the price they receive is not always the price quoted when they placed the order.

Example

Suppose an investor holds 175 shares of a company. The holding contains one round lot of 100 shares and an odd lot of 75 shares. If the investor sells the 75 shares, that sale is an odd-lot transaction. If the investor places a market order or a limit order for those 75 shares, the order is still an odd-lot order, and the broker's handling and costs may differ from those of a 100-share order.

Considerations for Investors

• Small orders may carry higher costs relative to their value.
• Fills for odd lots may differ from quoted prices in some situations.
• Brokers' policies on odd lots vary, so their published terms are the primary reference for how these orders are handled.