How to place orders for intraday fractional shares? Essential trading strategies for retail investors with small investments

For many investors who want to enter the stock market but have limited funds, odd-lot trading has become the best choice to lower entry barriers. Especially since you can see the transaction results immediately after how to place an order for odd-lot during trading hours, making it more convenient than after-hours trading. Today, we will analyze in detail the trading mechanism, operation process, fee structure, and practical tips for odd-lot trading.

Basic Concepts of Odd-Lot Trading

What is an odd lot? Why does it occur?

The standard trading unit for stocks is 1 lot, which is 1,000 shares. However, investors often hold less than 1,000 shares, and this portion is called an odd lot. The minimum buying or selling unit for odd lots is 1 share, with a maximum of 999 shares per transaction.

Odd lots usually occur when: an investor places a buy or sell order, and the order quantity or price is not fully matched, leaving a residual amount as scattered shares. Additionally, during stock dividends or rights issues, odd lots are also easily generated.

Key differences in placing orders for odd-lot during trading hours

Before October 26, 2020, odd-lot trading was only available after hours. But now, investors can trade odd lots during trading hours, which greatly enhances liquidity and trading convenience for odd-lot transactions.

Detailed Explanation of In-Trading-Hours Odd-Lot Trading Rules

Trading times and operation methods

Specific steps to place an order for odd-lot during trading hours

1. Log in to your broker’s trading platform
Use your broker’s App or web trading system to log in.

2. Switch to odd-lot trading mode
Find the “Odd-Lot Trading” option on the order page and click to switch.

3. Fill in trading information

• Stock code: Enter the stock code you want to trade
• Quantity: Enter a number between 1 and 999 shares (note: not “lots,” but “shares”)
• Price: Enter your desired transaction price
• Direction: Choose buy or sell

4. Submit the order
Only electronic orders are accepted; phone orders do not accept odd-lot orders during trading hours.

5. Wait for matching and execution
During trading hours, matching occurs at 9:10 and then every minute. If your price and quantity meet the conditions, the order will be executed.

Important reminder

If your order is not fully executed or only partially filled during trading hours, the remaining part will not automatically carry over to after-hours. To continue trading, you must place a new order during after-hours. After-hours trading only conducts one matching at 14:30; unfilled orders will be canceled automatically and will not carry over to the next trading day.

Comprehensive Analysis of Odd-Lot Trading Fees

Fee calculation method

The fee for odd-lot trading is the same as for full lots: 0.1425% of the transaction amount.

Example calculation:
Suppose you buy 200 shares of TSMC (2330.TW) at a closing price of 1065 TWD

• Transaction amount: 200 shares × 1065 TWD = 213,000 TWD
• Fee: 213,000 TWD × 0.1425% = 303.53 TWD
• With a 50% discount from the broker: 303.53 TWD × 50% = 151.77 TWD

Comparison of fees among different brokers

Practical Tips for Odd-Lot Trading

Issues with low-liquidity stocks

For stocks with low trading volume, placing an odd-lot order during trading hours may face difficulties in quick execution. You need to adopt strategies to improve the chances of execution.

Tip 1: Convert odd lots into full lots

If you hold 700 shares of a less popular stock as odd lots and want to sell quickly, you can:

• Buy an additional 300 shares during trading hours to make a full lot of 1,000 shares
• Sell this full lot through more active full-lot trading channels
• This significantly increases the speed and probability of execution

Tip 2: Price strategies at limit up/down

Particularly effective during after-hours trading: since only one call auction is conducted after hours, applying the “maximum transaction principle”

• Urgent buy: place an order at the limit-up price to greatly increase the chance of matching
• Urgent sell: place an order at the limit-down price to ensure priority under the maximum transaction principle

Tip 3: Choose trading times wisely

• During trading hours, prefer the 9:10-9:30 window when market participation is higher
• Avoid placing orders close to 13:30, as the remaining time is too short and unfilled orders will be canceled
• For after-hours trading, place orders early (13:40-14:00) to avoid last-minute price swings before 14:30

Advantages and Risks of Odd-Lot Trading

Core advantages

Significantly lower barriers: no need to allocate over 100,000 TWD at once; participation is possible with just 1,000 TWD

High flexibility: suitable for periodic investment, “testing the waters” with small funds

Suitable for beginners: lowers entry costs and helps learn investment concepts

Risks to be aware of

1. Relatively lower liquidity

• Less popular stocks have fewer odd-lot transactions, and execution may take longer
• Multiple orders or price adjustments might be necessary to complete the trade

2. Higher proportion of fees relative to small amounts

• For small transactions, fees constitute a larger percentage of the total
• It’s recommended to keep single trades above 10,000 TWD to effectively spread out costs

3. Limited trading process

• Only sell orders can be placed for odd lots; quick exit may be difficult
• Unfilled orders during trading hours will not carry over to after-hours and require reordering

Alternatives to Odd-Lot Trading

If you are concerned about the fees and liquidity issues of odd-lot trading, there are other ways to participate in the stock market with small funds.

Contract for Difference (CFD) Trading

CFDs are financial derivatives that allow you to control larger positions with only a small margin, without owning the actual stocks.

Comparison example:

• Buying 5 shares of Google (priced at $400 each): requires $400 × 5 = $2000
• Buying 5 units of Google CFD (margin 5%): only needs $2000 × 5% = $100

Advantages of CFDs include no additional commissions, transparent spreads, and no liquidity risk. However, they are more suitable for short-term traders, as holding positions overnight incurs interest costs.

Summary: How should small investors choose?

Odd-lot trading is most suitable for long-term investors and savings-oriented investors practicing dollar-cost averaging. Although placing orders during trading hours is relatively straightforward, attention should still be paid to liquidity and costs.

Key recommendations:

1. Confirm your risk tolerance and investment horizon
2. Choose relatively popular, liquid stocks for odd-lot trading
3. Keep single transaction amounts above 10,000 TWD to reduce fee impact
4. Understand the matching rules during trading hours and after hours, and select optimal order timing
5. For short-term speculation or high-leverage investments, consider derivatives like CFDs

As the convenience of odd-lot trading continues to improve, more retail investors can participate in the stock market with small funds. But the key to success still lies in mastering proper operation methods and risk awareness.