Simply stated, an "Odd Lot" is a stock order comprised of less than 100 shares of stock. So any stock order from 1 share to 99 shares is considered to be an odd lot.
This is the pertinent information traders should know about odd lot orders:
- An odd lot is a number of shares less than 100 (1-99)
- A "Round Lot" is 100 shares of stock
- Any number of shares that is a multiple of 100 is a round lot (i.e. 100, 600, 1,600, etc)
- An order for a number of shares greater than 100, but not a multiple of 100 (i.e. 142, 373, 1,948, etc) is a "Mixed Lot" (AKA PRL, or partial round lot, order)
- Odd-Lot orders are not posted to the bid/ask data on exchanges
- Odd-Lot executions are not posted to the tape (i.e. the odd-lot orders which are executed will not show up on reporting data such as Bloomberg as trades)
- Odd-Lot orders are taken into the order book at the exchange they are routed to. When the exchange is able to match an order from the other side of the book with the odd-lot, it will be filled. This could lead to delay on execution of an odd-lot.
- There are numerous guidelines for the routing of odd-lot orders: Odd-Lot orders to initiate positions will not be routed to primary exchanges; Odd-Lot orders can be routed to primary exchanges, but only if the order in question is to close out a preexisting position; IB will not direct-route odd-lot orders which initiate positions to primary exchanges, therefore these type of orders should be Smart Routed so that IB's routing system can send the order to an ECN for execution. The exception is that odd lots can be routed to NYSE/ARCA/AMEX, but only as part of a basket order or as a market-on-close (MOC) order.
- A mixed lot or PRL (i.e. 257 shares) direct-routed to NYSE/AMEX will be submitted in whole to the exchange (applies to both market and limit orders). If the order is direct-routed to NYSE/ARCA, only the round lot portion of the order will be submitted and, if it is executed, the IB system will cancel the remaining odd-lot portion of the order. If the order is routed via IB Smart Routing, all market centers are eligible to receive the order according to the Smart Routing logic (including NYSE/ARCA, but only for the round lot portion of the order).
- IB will not route odd-lot orders for HOLDRS. The odd-lot portion of a PRL order for HOLDRS will be rejected by the IB system after the round lot portion of the order is executed.
- Individual exchanges may impose certain restrictions on odd lot orders, in addition to any of the restrictions mentioned above