What is an odd lotter?

It's an investor who buys shares or other securities in small or unusual quantities. Shares tend to be traded in multiples of 100 - known as a round lot. A small investor who purchases fewer than 100 is known as an odd lotter.

Where have you heard about odd lotters?

You might have heard the term being used outside the financial industry - it can mean any irregular packaging in a general and objective sense. But the term is mainly in use in stock market circles.

What you need to know about odd lotters.

There could be several reasons for being an odd lotter - an investor might not want to make an investment of 100 shares or more in a particular company, for example. Or the cost of 100 shares of a security might be beyond an investor's means.

Odd lotters were central to a historical financial concept called odd lot theory. This was the notion that investors could outperform the stock market by identifying the least informed participants and making investments opposite to theirs. But the theory has lost popularity as there's little evidence that it works.