What is an Odd-Lotter?
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 Does an Odd-Lotter Work?
For example, let's assume John wants to buy a few shares of Disney stock as a present for his son's 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 Does an Odd-Lotter Matter?
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.