Round Lot: What It Is, How It Works, and Trends

Key takeaways

• A round lot is the standard trading unit for a security, typically 100 shares for U.S. stocks or $100,000 face value for bonds.
• Round lots are often cheaper and faster to execute than odd lots, and exchanges sometimes give them priority.
• Advances in electronic trading and fractional-share services have made odd lots and smaller trades more common.

What is a round lot?

A round lot is the normal or standard minimum trading size for a financial instrument as set by an exchange. For U.S. equities, a round lot is usually 100 shares (or a multiple of 100). For many bond markets, a round lot is $100,000 in face value (or multiples thereof). Orders smaller than the exchange’s round-lot size are called odd lots.

How round lots work

Exchanges and market makers often treat round-lot orders as the default unit for quoting, executing, and prioritizing trades. Because round lots represent bulk orders, they typically:
* Incur lower per-share trading costs,
* Execute more quickly,
* Are easier to aggregate and route electronically.

Historically, exchanges required round-lot orders for some order types; today, electronic trading and broker services have reduced many frictions that once made odd-lot trading less efficient.

Types of round lots by market

• Stocks and ETFs: Standard round lot = 100 shares (or multiples of 100).
• Bonds: Standard round lot = $100,000 face value (or multiples). Smaller blocks are historically treated as odd lots and may command different execution processes.
• Options: Standard options contracts typically represent 100 shares of the underlying (contract multiplier = 100). Traders commonly buy and sell single contracts; the “lot” concept is therefore tied to the contract multiplier rather than blocks of 100 contracts.
• Futures: Lot (contract) size depends on the underlying—for example, a wheat futures contract might represent 5,000 bushels.
• Foreign exchange: A standard lot is 100,000 units of the base currency. Mini lots (10,000) and micro lots (1,000) are also common.

Round lots vs. odd and mixed lots

• Odd lot: Any trade smaller than the round-lot size (e.g., 37 shares in a market with 100-share round lots).
• Mixed lot: An order that contains both a round-lot portion and an odd-lot remainder (e.g., 198 shares = one 100-share round lot + one 98-share odd lot).

Odd-lot trades were once slower and costlier, but modern trading systems, retail brokerages offering fractional shares, and algorithmic order aggregation have narrowed the gap. Some exchange order types or display rules may still favor round-lot executions.

Round lot holder and board lot

• Round lot holder: An owner of unrestricted shares that form a round lot (e.g., 100 or a multiple of 100 unrestricted shares). “Unrestricted” means the shares can be sold or transferred without conditions.
• Board lot: The exchange-defined standard trading unit; in many markets it equals the round lot but can vary by exchange. For example, some international exchanges use larger board-lot sizes (e.g., 1,000 shares).

Prevalence and current trends

Institutional and professional traders continue to transact heavily in round lots because of cost and operational efficiencies. At the same time, retail participation, fractional-share programs, and improved electronic execution have made odd-lot and fractional trading common and inexpensive. Markets have adapted so that small-dollar investing strategies (like dollar-cost averaging) are practical for more investors.

Bottom line

A round lot is the exchange’s standard trading unit—usually 100 shares for stocks or $100,000 for bonds—which historically provided execution and cost advantages. While round lots remain important for institutional trade flow and market structure, technology and new brokerage services have increased the accessibility and affordability of odd-lot and fractional-share trading for retail investors.