Even / Odd lot - trading

Discussion in 'Order Execution' started by Joe19314, May 9, 2005.

  1. Joe19314



    so far I've only traded even lots of shares (100, 200, 300, ...) in NYSE and ECN-markets.

    a) What will happen to my order executions if I dare to trade 120 or 287 ? Will I get worse prices if compared to even lots ?
    b) Is there a difference wether its a trade on NYSE or on ECNs ?
    c) Should I better stick to even lot - trading ?

    Thanks for your help !

  2. Neil


    I do odd lots all the time now... I always thought it might be a problem but once I started I have found no noticable issue thus far. I have my software set to a fixed dollar value for each trade and it rounds it up or down to the nearest five quantity for neatness sake.

    Not even been difficulties when upon occasion it has been sub 100 quantities.. altho I bet someone gets pissed when 85 of their 100 order gets filled! lol Have a go and see what happens.. no apparent difference either between nyse and ecn fills.. apart from the usual slowness on nyse stocks compared to nasdaq ones..

  3. Choad


    Yeah, thanks guys...I keep getting fills of 232 and 471, etc, on my round lot orders...

    Oh well, a profit's a profit! :D
  4. alanm


    There are a number of issues with odd- and mixed-lots with various stocks, exchanges/ECNs, trading platforms, brokers/commission structures, etc. If you really want to trade odd or mixed, you need to study those issues before attempting to trade them. Personally, I stick to round-lots except when absolutely necessary.

    Some examples:

    - ARCA charges $0.03/share (yes, 3 CENTS) for odd-lot orders (in listed stocks at least)
    - IB has restrictions and undocumented issues with odd- and mixed-lots
    - In Hammer, when you select "cover 100%" on a mixed-lot position, it rounds the quantity down to the nearest odd-lot. Also, "box orders" are controlled by the size keys only - you can't easily set odd- or mixed-lot sizes for orders to open a position.
    - ETFs no longer trade in odd-lots

    odd-lot: < 100 shares
    mixed-lot: >100 shares and not an integral multiple of 100 shares
    round-lot: An integral multiple of 100 shares
  5. qazmax


    Joe it does matter trading listed stocks on ECNs. If the volume on your ECN of choice is enough to fill your order then it is no problem. You will get a classic, speedy ECN fill. However, ARCA is an exchange and as an exchange it has to use ITS to send its orders to other market places. ITS does not accept odd-lots.

    So what happens is this....

    * You send an order to sell 120 shares of ABC
    ARCA has a bid that matches your price for 100 shares only leaving 20 shares open.

    * ARCA cannot ITS this to an exchange if an exchange is matching or bettering your price.

    * Your 20 shares will not execute until ARCA becomes bid at that price. This may mean that you are filled below the best bid in the market place.

    If an ECN is NOT an exchange like ARCA they can route your order via the DOT system to NYSE and it then gets processed like a normal odd-lot.

    My experience is that the NYSE is surprising superior at executions in odd-lot attached orders (E.g. 120 sh). Basically this is because of outdated rules prohibiting ITS odd-lots and dissiminations of quotes less than 100 shares. But to their credit the NYSE usually honors the ECN markets for the whole amount.

  6. Joe19314


    Thanks for your comments !

    Well, today I'm not trading listed stocks at ECNs, only at NYSE. What advance would I have to trade these at ECNs ? I am not very familiar about all the exchange-rules and routing.

    This week I started to trade odd-lots and so far I did not have any executions worse (or better) than with even-lots.

  7. qazmax


    Speed (ECNs are always faster)

    Price advantage, if the ECN is superior to the NYSE. Although the NYSE usually honors the away markets. They may take their sweet time if they want to see where the market is going first.

    You might also negotiate cheaper commissions with your broker if you were a heavy commission generator. NYSE is more expensive for most B/Ds and they would prefer you to use the ECNs.

    IMO - For the average person the NYSE is the best marketplace for listed trades. But if you love the details of trading you must check the ECNs for price and size before sending your trades.