Odd lot is the mechanism which makes it easy for traders or investors to buy stocks in small or ‘odd’ numbers. Generally and historically, stocks have been traded in standard units of 100, 1000 or more, similar units of shares, known as ‘lots’. Retail investors, however, cannot and do not want to invest in big lots, especially when the share prices are high and they are just starting out. Thus, they buy fewer shares or small lots like say, 11, 15 or 19 shares and these are known as ‘odd lots’. Any trade executed or investment made between 1-99 shares is referred to as an ‘odd lot’. Stocks in 100s or similar lots were prevalent and preferred due to the ease of calculation with respect to commissions to brokers and corporate actions on shares. However, with electronic trading and mass retail participation, odd lots have become quite popular and the norm as well.
