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Odd Lot Orders Definition

Definition

The word strange lot describes to a order which isn’t just a multiple of their standard component of trading for this security. A strange lot for shared stock isn’t any order which isn’t really a multiple of 100 stocks.

Explanation

Since the normal component of stocks would be 100 stocks, any sequence for one to 2 99 stocks is considered a strange lot. Broker commissions for trades are usually stated concerning a normal trading platform to get a security. Regarding stocks, the commission charged by brokers to perform a trade would ordinarily be considered a minimum fixed amount to get a normal trading platform. Back in years past traders might avoid placing requests for unusual loads, as the relatively large commission will hamper their yield .

Odd many are treated differently from stock deals too. By way of instance, those orders don’t influence the bid / ask prices, nor will they be submitted to tickers. Since the trade isn’t in a standard unit, execution of the transaction can also be delayed.

Over the years, competition for customers has lowered broker commissions, and placing an odd lot order is less of a concern.