Kinds of Stock Orders

When you buy or sell stocks you can allocate different types of orders to improve the execution price. The increase in size of an order is also important. To use a round lot generally means that the number of stocks negotiated are 100 or a multiple of 100.

Fro very cheap stocks (penny stocks) a round lot could be 500 to 1000 stocks for higher price stocks a round lot could be 10 stocks. The round lot of 10 stocks is known as cabinet stocks. Berkshires Hathaway type A stocks are a good example of cabinet stocks. In May 2005 each stock was being negotiated at $84,400 being the most expensive stock in NYSE.

An odd lot for many cabinet stocks consists in negotiating from 1 to 9 stocks.

 With normal priced stocks an odd lot is formed by 1 through 99 stocks. For those cheap ones an odd lot would be less than 500 stocks. Investors that negotiate odd lots generally pay more than those who negotiate in round lots. Commissions being paid for carrying out negotiations in odd lots can result higher.

Orders for more than 10,000 stocks are denominated as black trades. These orders normally allocated by group clients are managed in varied ways.

Commissions are very much lower than usual negotiations and orders are carried out immediately. By knowing the type of orders to use and how are they carried out you could reduce your costs per transaction and avoid any kind of misunderstanding with your agent.

Types of Orders:

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