What is a Broken Lot?
” Sometimes referred to as an odd lot or an uneven lot, a broken lot is a bank of shares of stock that are less than one hundred shares for most types of stock, or less than ten shares of a stock that is thinly traded. Since this form of trading is considered to be a little out of the ordinary, brokerage houses usually employ a few different rules to dealing with a broken lot. . Generally, shares are traded in what is known as a round lot. A round lot is defined as a bank of one hundred shares of stock. When the deal involves a transaction that is less than 100 shares of stock, most brokerages will calculate both the charges associated with the actual transaction at a different rate.
Sometimes referred to as an odd lot or an uneven lot, a broken lot is a bank of shares of stock that are less than one hundred shares for most types of stock, or less than ten shares of a stock that is thinly traded. Since this form of trading is considered to be a little out of the ordinary, brokerage houses usually employ a few different rules to dealing with a broken lot. Generally, shares are traded in what is known as a round lot. A round lot is defined as a bank of one hundred shares of stock. When the deal involves a transaction that is less than 100 shares of stock, most brokerages will calculate both the charges associated with the actual transaction at a different rate. Along with the transaction charges, the broker is likely to apply a higher commission rate to the transaction as well. While there is undoubtedly a higher expense associated with trading or purchasing a broken lot, there can be some advantages as well. For investors that are attempting to secure as many shares
