Odd Lots

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If a round lot is the "six-pack" of stock purchase, an odd lot is the la carte of stock purchase. Simply put, an odd lot is any trade involving fewer than 100 shares (or fewer than 10 in the case of those cabinet stocks). Although the price per share can be a little higher, odd lots are the preferred method of purchase for many investors.

First of all, you can purchase exactly the number of shares you want; no more, no less. If you want to buy 29, 32, or 61 shares of stock, you don't have to round up to 100, as in a round lot purchase. Second, you can purchase by amount rather than by share. For example, you want to buy $100 worth of XYZ Company stock, and the stock is worth $12 per share. By buying in an odd lot, you can buy 8.3 shares of XYZ stock.

Plain English

An odd lot is any number or shares of stock that are purchased outside of a predetermined standard.

Many investors do buy in odd lots and are unhappy about not getting the price deals available in round lots. As a result, many brokerages have addressed this situation by grouping together their own investors in order to purchase round lots at round lot prices. So, even without friends , you may still be able to get the better price.

I l @ ve RuBoard