ABSTRACT
One of the minor tactical questions bound to plague you is whether to trade in round lots of 100 shares or odd lots (less than 100 shares in active stocks).
(EN: In Internet-age markets, this question has virtually lost its relevancy. In Magee’s time, there was a distinct disadvantage to trading odd lots, and one traded odd lots only if hampered by limited capital. Now that an investor can achieve full diversification in an odd lot position by buying odd lots of Standard & Poor’s Depositary Receipts (SPDRs) and DIAMONDs™, there seems little point in discussing it. There is, of course, always the question of broker commission-if the broker has a fixed commission rate regardless of the size of the trade, then the small investor gets nicked. It would seem that this follows the old adage that the rich get richer. But now the small investor can strike back by finding a broker who does not charge commissions. At first I thought that commission-free brokers were making up their profit on volume. But there are in fact other ways to make a profit on trades than charging a commission-for example, directing the execution of the orders to a trader who needs “order flow.”
