Odd lots are buy-and-sell orders that don’t fit precisely into groups of 100, 500, or 1,000 shares — groupings called board lots. Board lots exist because they standardize trades and make it easier for brokers to match buyers and sellers. Odd lots exist because not everyone wants to trade in board lots.

The actual number of shares in a board lot varies based on the value of the stock and the exchange, but the overall concept is the same.

Anything less than a board lot is an odd lot. If Company ABC’s stock closes at $0.95, the next day, a board lot of ABC will be 500 shares. So 100 shares of ABC will be an odd lot. If you buy more than a board lot that is not a multiple of a board lot — for example, 530 shares of ABC — that is a mixed lot and will be treated as two buy orders: one board lot of 500 shares and one odd lot of 30 shares.

How are odd lots traded?

In Canada, most marketplaces have odd lot trading programs, where market makers agree to trade against odd lot orders. Market makers are effectively financial institutions that buy and sell assets to keep the market moving. If there weren’t market makers and you wanted to sell seven shares of a stock, you’d need to go out and find another person interested in buying precisely seven shares of that same stock.

How are odd lot prices determined?

The price you pay for odd lots depends on something called the Protected Canadian Best Bid and Offer (CBBO). The CBBO is the best bid (price someone is willing to pay) and the best offer (price someone is willing to sell for) available on a particular stock across the multiple Canadian marketplaces that have been defined to be included in this calculation. Odd lot orders are guaranteed to be filled at the CBBO.

For example, if ABC is offered at $0.95 a share on the TSX and $0.94 a share on Nasdaq Canada, the Canadian Best Offer for it is $0.94. If ABC is bid at $0.92 on the TSX and $0.91 on Cboe Canada, the Canadian Best Bid is $0.92. So in this example, the CBBO would be $0.92-$0.94. If you placed a limit buy order at $0.95 for seven shares, your order would be filled at $0.94, because that was the CBO.

How are odd lot trades different from board lot trades?

There are a few ways trading odd lots is different from trading board lots.

1. Odd lots and board lots don’t trade in the same place.

Shares traded in a big market like the TSX are logged in “books”’. Each “book” is an advanced computer system that displays individual orders and matches them. Board lots are traded through the Continuous Order Book (also called the Central Limit Order Book, or CLOB), a real-time market that matches individual orders. Orders within the CLOB can trade with each other, instead of relying on a market maker. Users can also see individual orders on the bid or ask, the sizes of these orders, and the prices in real-time. Odd lots, however, go through the Odd Lot Book. As we mentioned above, in Canada, the Odd Lot Book automatically guarantees that any odd lot order will be completed at the CBBO.

2. The Odd Lot Book’s trades may not be reflected in a stock’s historical data.

Typically, a stock’s High, Low, or Open prices show only board lot trades. This can occasionally lead to confusion when the price an investor received for an odd lot order is outside the High or the Low of the day — even though they execute at the CBBO at the time of the order. That happens because, if no board lot traded at the price the odd lot did, the odd lot transaction is not recorded as an official price. And, therefore, it would not be reflected in the High, Low, or Open prices.

3. Odd lot trades don’t go through the instant markets open.

For TSX and TSX Venture listed securities, every morning, before the 9:30 a.m. EST bell, an algorithm considers all of the pre-opening orders for each stock and settles on a figure called the Calculated Opening Price (COP). Once that’s decided, the bell sounds and any odd lot orders submitted at that price or better go through. Odd lot orders don’t start trading until all orders at the COP are matched and the market widens to create the bids and offers: the CBBO.

Frequently asked questions