Round Lot
The standard trading unit for a security, typically 100 shares for equities listed on major US exchanges.
What is Round Lot?
A round lot is the conventional minimum trading unit accepted by exchanges for the most favorable execution terms. For US equities, one round lot equals 100 shares. Orders for fewer than 100 shares are classified as odd lots and have historically received different — and sometimes less favorable — execution compared to round lots, though exchange rule changes (particularly Regulation NMS and Rule 606 reforms) have reduced this disadvantage in recent years. Round lots remain important for institutional investors computing order slippage, for options contracts (which cover 100 shares per contract), and for bid-ask spread calculations that reference the best quotes available in round-lot quantities.
Example
An investor buying 150 shares of a stock is effectively submitting one round lot of 100 shares plus one odd lot of 50 shares. While modern broker execution systems usually handle this seamlessly as a single order, market microstructure researchers note that odd-lot quotes are not always included in the National Best Bid and Offer (NBBO), which can cause the displayed spread to slightly misrepresent true liquidity for smaller order sizes.