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.
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Cached on May 23, 2012, 6:29 pm