Round Lot

A round lot is the standard trading unit of 100 shares on stock exchanges. Historically, round lots received preferential treatment in terms of execution priority, pricing, and reporting. Orders for exactly 100 shares or multiples thereof (200, 300, 500, etc.) were considered standard, while orders for fewer than 100 shares were classified as odd lots. The round lot convention dates back to the early days of stock exchanges when trading in standardized units simplified settlement and clearing. However, the practical significance of round lots has diminished substantially with the rise of electronic trading, decimal pricing, fractional shares, and high-priced stocks. When shares of companies like Amazon or Berkshire Hathaway trade at hundreds or thousands of dollars per share, a round lot represents a significant investment ($18,000+ for Amazon at $180/share), making odd-lot trading the norm for most retail investors.