Written by:
Image
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades.

Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

View all posts
Updated October 16, 2020

What is a Round Lot?

A round lot is a securities trade for 100 trading units. In stock trading, a round lot is 100 shares. However, inactive stocks generally trade in 10-share lots.

How Does a Round Lot Work?

Round lots are the standard trading amount, and thus they usually incur the most favorable commission costs. For example, if you wanted to buy six round lots of Company XYZ stock, you would be buying 600 shares.

Investors, especially individuals, frequently cannot or do not want to bear the expense of trading shares in round lots, however, which is why most brokers also accept “odd-lot” trades (though they may charge a higher commission for doing so). However, the advent of electronic and online trading platforms has reduced, and in some cases eliminated, these odd-lot premiums.

Why Does a Round Lot Matter?

Round lot investors tend to be larger investors. The ratio of odd-lot buying to odd-lot selling, on the other hand, is often used to evaluate small-investor sentiment.

Ask an Expert about Round Lot
At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Round Lot.
Be the first to ask a question

If you have a question about Round Lot, then please ask Paul.

Ask a question

Read this next

Don't Know a Financial Term?
Search our library of 4,000+ terms
 - profile
Ask an Expert about Round Lot

By submitting this form you agree with our Privacy Policy

Share
close