Board Lot and Odd Lot

Board lot is the minimum size a stock can be traded and it is controlled by the stock price.  If a stock has a board lot of 100 shares, that means that you can buy or sell that stock for a minimum of 100 shares and in the scale of 100 thereafter.  With this board lot, you can trade it at 100, 200, 300 and so on and so forth.

Odd lot on the other hand is a number of stock shares not wholly divisible by a minimum board lot.  For example the minimum board lot for EDC (Energy Development Corporation) is 100 shares.  If you have 150 shares then 50 shares is considered as odd lot.  

Now, you may be wondering, if stocks are traded by board lot then why is there such a thing as odd lot.  Well, this odd lot usually happens when a company declares a stock dividend or stock rights.  For example you have at present 300 shares of EDC then they declare a 25 % stock dividend, this means you will receive additional 75 shares.  The additional 75 shares is considered an odd lot since it is below the minimum board lot which is 100 shares.  

This odd lot shares can only be traded at Odd Lot Boards but are not easy to trade and are usually traded at a discounted price.

You may minimize getting this odd lot shares by buying additional shares whenever a company declares a stock dividend.  As for our example above, once you learned that EDC will give out a 25% stock dividend, you may buy additional 100 shares so you will get a total of 400 shares.  This 400 shares will give you an additional 100 shares dividend which is already equivalent to the minimum board lot.

I have an odd lot shares for BPI last year when they declared a stock offering.  I did not try to sell it so it’s just there in my account, anyway it still earns interest whenever the company declares a cash dividend so I’ll just leave it there.

Below is a table of board lot for Philippines Stock Market:

Stock Price Range		Board Lot
0.0001	0.0099	1,000,000
0.01	0.049	100,000
0.05	0.249	10,000
0.25	0.495	10,000
0.5	4.99	1,000
5	9.99	100
10	19.98	100
20	49.95	100
50	99.95	10
100	199.9	10
200	499.8	10
500	999.5	10
1000	1999	5
2000	4998	5
5000	Up	5

I hope you learned something from this post.

Happy investing everyone.