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Finance Glossary

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Odd Lot Theory


The theory here is that when you see a lot of trades with odd lots (small lots of less than 100 shares and in odd numbers), you should run in the opposite direction.

The idea is that odd lots are usually traded by small retail investors (so average Joes who think they're the Wolf of Wall Street because they read some of Investing for Dummies that one time on vacation). Most pros think that small retail investors don't know Jack and that you should do pretty much the opposite of what these guys are doing.