Prop and odd lots

[trader105]

Quote from jnbadger:

If you trade retail, odd lots shouldn't be a problem. But if you're a licensed trader, you're considered to be a "pro" and are expected to be accountable for at least 100 shares at a crack.

I guess my questions remain unanswered. I mean "What are the differences and why 140 shares is allowed while 40 shares is not allowed?" Why does SEC think they are different?

And what are the consequences?

 

[Shreddog]

Quote from trader105:

I guess my questions remain unanswered. I mean "What are the differences and why 140 shares is allowed while 40 shares is not allowed?" Why does SEC think they are different?

And what are the consequences?

There have been situations over the years where <100 share orders were given preferential treatment with respect to order handling and subsequently exploited by professional traders. Not really applicable these days, but the rules are still in effect. Google SOES Bandits for an example.

 

[Don Bright]

Quote from Shreddog:

There have been situations over the years where <100 share orders were given preferential treatment with respect to order handling and subsequently exploited by professional traders. Not really applicable these days, but the rules are still in effect. Google SOES Bandits for an example.

That's pretty much why....

Also, retail firms give great "deals" on market orders ($7.00 per trade etc.)....they love to see small orders....think about it. That would be $14.00 per hundred shares....

Don

 

[ksonsinc]

Well if you trade with retail like interactivebrokers the commision r not that mch
I understand the OP ideas
IF he has a $25000 account he does not want to take that much risk
Size does matter especially when you are trading 10 different shares
and you want to alocate them in different sector
let say i want to buy aapl
20 shares appl
40 shares rimm
50 shares etc

you,r chance are more , then putting everything in 1 basket