A Complete Guide to Odd Lot Trading: How Can Small Investors Buy Odd Lots More Cost-Effectively?

What are odd lots? Why are they worth paying attention to?

The minimum trading unit for stocks is usually one lot (1,000 shares), but investors sometimes hold smaller, scattered shares less than 1,000, which are called odd lots. The minimum trading unit for odd lots is 1 share, often resulting from unfilled buy or sell orders or fractional shares during stock distribution.

How to buy odd lots has become the first choice for many small investors entering the stock market. Starting October 26, 2020, the Taiwan Stock Exchange opened intraday odd lot trading, evolving from purely after-hours trading to a flexible investment method that can be operated 24 hours a day.

Full analysis of odd lot trading hours

Odd lot trading is divided into two sessions, each with different rules:

Intraday trading (9:00-13:30)

• Order method: Electronic orders (via broker trading platform)
• Matching method: First match at 9:10, then every 1 minute through call auction
• Order priority: Price priority, then submission time at the same price

Investors can submit odd lot orders starting at 9:00 AM, but note that unfilled intraday orders will not automatically carry over to after-hours, requiring re-entry.

After-hours trading (13:40-14:30)

• Order method: Electronic or manual phone orders
• Matching method: One call auction at 14:30
• Order priority: Price priority, then random order at the same price

Unfilled orders are automatically canceled and will not carry over to the next trading day.

How are odd lot transaction fees calculated?

When buying odd lots, the fee calculation is exactly the same as for full lots, based on 0.1425% of the transaction amount. However, each broker sets a minimum fee, usually starting at NT$1, and offers discounts for electronic orders.

For example, buying 200 shares of TSMC (closing price NT$1065):

• Basic fee: 200 × 1065 × 0.1425% = NT$303.53
• With a 50% discount: NT$303.53 × 50% = NT$151.77

Major broker fee plans:

Key reminder: It’s best to keep the purchase amount above NT$10,000, as otherwise the fee ratio is high and eats into returns.

Core regulations for buying and selling odd lots

✓ Odd lots can receive dividends and participate in rights issues

Odd lot holders enjoy the same shareholder rights as full lots, including cash dividends. When distributing dividends, odd lots are paid out in cash or sold collectively.

✓ Minimum unit limit for odd lot trading

Each order cannot exceed 999 shares, with a minimum of 1 share.

✓ Easy to sell odd lots

Taiwan Stock Exchange recognizes odd lot trading. As investor demand increases, liquidity improves, making it suitable for small investors’ daily trading.

How to buy odd lots? Account opening process

Opening an account is the same as for full lots. Just switch to the “Odd Lot Trading” mode on the broker app’s order page and enter the number of shares between 0-999. Usually, you only need to prepare:

• National ID card
• Second ID (health insurance card or driver’s license)
• Your bank account

Some brokers may require proof of financial capability.

Tips for selling odd lots more easily

1. Convert odd lots into full lots

For less popular stocks with low odd lot trading volume, it may be difficult to execute. You can buy enough odd lots to make a full lot (1,000 shares), then sell through more active full lot trading, greatly improving the success rate.

2. Extreme price strategy after hours

Since after-hours odd lot trading only matches once, if you are sure to buy, place a limit order at the limit-up price to maximize the chance of execution. When selling quickly, place a limit order at the limit-down price to increase the likelihood of a sale.

3. Distribute orders over different times

Unfilled intraday orders need to be re-entered; submitting orders both during and after trading hours increases the chance of matching.

Pros and cons of odd lot trading

Advantages

Low capital threshold: Starting from NT$1,000, suitable for beginners, allowing sufficient liquidity for daily expenses.

Friendly for periodic investment: Suitable for dollar-cost averaging plans, no need for large lump sums.

Low-cost testing: If you want to explore a stock but are unsure, small investments allow for experience without big risk.

Disadvantages

Lower liquidity: Odd lot buy/sell orders are fewer, requiring more time to match, especially for less popular stocks.

Relatively higher fees: Minimum fee rules (usually NT$20 or more) can eat into small investments; additional service fees may apply.

Limited trading process: Odd lots can only be sold, not bought via order; each sale must be full, limiting flexibility. When broker inventory is insufficient, investors may not get the desired quantity.

Golden rules for odd lot investing

Choose stocks, not timing

Odd lot trading is suitable for long-term holding, not frequent trading. Focus on fundamental analysis, selecting quality companies with growth potential.

Regularly review risk tolerance

Understand your own risk capacity, choose appropriate products and strategies, and avoid blindly following trends.

Learn basic analysis methods

Master financial statement interpretation, technical chart analysis, and other foundational skills to improve decision success.

Maintain rational discipline

Avoid impulsive trades, develop and strictly follow an investment plan, ensuring steady long-term returns.

Summary

How to buy odd lots is no longer difficult. The opening of intraday trading greatly lowers the barrier for small investors. Odd lot trading allows flexible allocation of small funds, with multiple channels like broker platforms and phone orders, making operations increasingly convenient.

However, to succeed in the odd lot market, investors need sufficient knowledge and discipline. From understanding risk tolerance, learning fundamental analysis, to avoiding herd mentality, every step is crucial. Once you master proper trading hours, fee calculations, and buying/selling techniques, odd lot investing can become a powerful tool for wealth accumulation.