Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Odd-Lotter

What it is:

An odd-lotter buys securities in odd lots. An odd lot is a group of shares that is not a multiple of 100 (100 shares is called a round lot).

How it works (Example):

For example, let's assume John wants to buy a share of Disney stock for each year of his son's life as a birthday present for his 12th birthday. John calls his broker with a buy order for 12 shares of Disney stock, which is an odd lot. This makes John an odd-lotter.

Why it Matters:

Typically, individual investors are the most likely to be odd-lotters. Because it takes much more work to fill an order for an odd lot, John's broker may charge a higher commission. The broker may have to purchase a round lot (100 shares) and then break the shares up to provide John with his 12 shares.