Odd Lot

Odd Lot – We see usually in the stock market, shares are traded across in the form of lots which are termed as “Market Lots” These are fairly easy to buy and sell too.

There are shares which form a lesser number than the market lots and hence form an odd lot. Since majority of the trading is done via “Market Lots” the odd lots become difficult to buy or sell. Further, the odd lot fetch a considerably lower price than a market lot which makes it a loss for the trader. Generally, odd lots come from Bonus or Rights Issues.

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However, everything about Odd lots is not bad; as per government advisory all stock market listed companies must form a trust together and deal in typically odd lot shares. The trustee will be trading in these shares and will sell the odd lot shares through brokers. Further, the trustee won’t be allowed to do any independent trading as well. A particular company will send all the rights and bonus shares to the trustee whose job will be to consolidate the odd lots into “Market Lots” and have them traded through a recognized broker, the one who deals with the shares of that company.

Edited and Updated 08th March 2014

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