securities trade made for less than the normal trading unit (termed a round lot). In stock trading, any purchase or sale of less than 100 shares is considered an odd lot, although inactive stocks generally trade in round lots of 10 shares. An investor buying or selling an odd lot pays a higher commission rate than someone making a roundlot trade. This odd-lot differential varies among brokers but for stocks is often 0.125 per share. For instance, someone buying 100 shares of XYZ at $70 would pay $70 a share plus commission. At the same time, someone buying only 50 shares of XYZ would pay $70.125 a share plus commission.

generally accepted unit of trading on a securities exchange. On the New York Stock Exchange, for example, a round lot is 100 shares for stock and $1,000 or $5,000 par value for bonds. In inactive stocks, the round lot is 10 shares. Increasingly, there seems to be recognition of a 500-share round lot for trading by institutions. Large denomination Certificates of Deposit trade on the Over The Counter market in units of $1 million. Investors who trade in round lots do not have to pay the differential charged on odd lot trades.