Is the concept of an “odd lot” adjusted to stock price?

Question

This page suggests that orders under 100 shares of stock are considered "odd". I was told that stock exchanges "do not want odd lots".

Is this statement true? For example, 50 shares of GOOG are worth over $30 000. Would an exchange turn down such an odd lot?

Answer 1

I will assume that you are not asking in the context of high frequency trading, as this is Personal Finance Stack Exchange. It is completely acceptable to trade odd lots for retail brokerage customers. The odd lot description that you provided in your link, from Interactive Brokers is correct. But even in that context, it says, regarding the acceptability of odd lots to stock exchanges:

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.

Google GOOG is traded on the NASDAQ. Everything on the NASDAQ is electronic, and always has been. You will have no problem selling or buying less than 100 shares of Google.

There is also an issue of higher commissions with odd lots:

While trading commissions for odd lots may still be higher than for standard lots on a percentage basis, the popularity of online trading platforms and the consequent plunge in brokerage commissions means that it is no longer as difficult or expensive for investors to dispose of odd lots as it used to be in the past.

Notice what it says about online trading making it easier, not more difficult, to trade odd lots.

• I do recall that it would take longer to get odd lot trades executed, but not significantly, not for a non-institutional order.