Odd Lot Theory Definition
Odd Lot Theory is a theory of technical analysis based on the assumption that odd-lotters (small investors who deal in fewer than 100 shares at a time) are badly informed and have a low risk tolerance. Therefore small individual investors are always wrong and it is a good idea to trade contrary to their trading patterns. A good time to buy is when they are selling stock. The theory was popular in the 1960s and 1970s, but is outdated now.