What to do if you can't sell fractional shares? A complete guide to trading timing and advanced techniques that small investors must know

Odd lot trading was once a nightmare for many small investors — not only because the minimum purchase was low, but also because selling often resulted in the awkward situation of “unable to sell odd lots.” However, since Taiwan’s stock exchange opened intraday odd lot trading on October 26, 2020, this problem has been significantly improved. Today, we will clarify the true reasons why odd lots can’t be sold, the complete trading mechanism, cost analysis, and advanced trading techniques.

Why Do Odd Lots Occur? Clarifying the Trading Mechanism

The Nature of Odd Lots

The minimum trading unit of stocks is 1 lot, which equals 1,000 shares. But when investors hold fewer than 1,000 shares, this portion is called an “odd lot,” with the minimum trading unit being 1 share. Odd lots usually result from incomplete execution of original buy or sell orders, such as prices fluctuating too quickly or the volume not reaching the target. Additionally, odd lots naturally occur during stock distribution, rights issues, and dividend processes.

The Fundamental Reasons Why Odd Lots Can’t Be Sold

The main reasons why odd lot trading often results in “unsold” situations are:

1. Lack of Liquidity: For less popular stocks, odd lot trading volume is very small, making matching difficult.
2. One-time Matching Limitation: After-hours trading only has one auction per day; missing it means waiting until the next day.
3. Automatic Expiry of Orders: Unfilled orders during the trading day do not carry over to after-hours; they need to be resubmitted.
4. Inappropriate Price Setting: Setting prices too high or too low can prevent transactions.

Odd Lot Trading Hours and Rules: Mastering the Trading Window is Key

Understanding trading hours is the first step to solving “odd lots can’t be sold.” Currently, odd lot trading is divided into two sessions:

Intraday Trading Session (09:00-13:30)

Investors can submit buy or sell orders for odd lots starting at 9:00 AM via broker trading platforms (electronic orders). The first matching occurs at 9:10, followed by auction matches every minute. Transaction priority follows the “price priority” rule, and if prices are the same, earlier submitted orders are prioritized.

Note that during intraday hours, only electronic orders are accepted; phone or manual orders are not permitted. If orders are not filled during the day, they automatically expire, and investors must resubmit after hours or the next day.

After-hours Trading Session (13:40-14:30)

Starting at 13:40, investors can place orders via electronic orders or by calling broker customer service for manual orders. There is only one auction at 14:30; unfilled orders are automatically canceled and do not carry over to the next trading day.

Cost Analysis of Odd Lot Trading: Key to Controlling Costs

Basic Calculation Method

The commission for odd lot trading is the same as for full lots, at 0.1425% of the transaction amount. For example, buying 200 shares of TSMC (2330.TW) at the latest closing price of 1065 TWD:

200 shares × 1065 TWD × 0.1425% = 303.53 TWD

Brokerage Fee Differences

Different brokers offer varying discounts. Here are comparisons of major brokers:

Fubon Securities offers a 1.8 discount rate with a minimum fee of 1 TWD; E.SUN Securities offers a 2 discount rate with a minimum fee of 1 TWD; KGI Securities offers a 60% discount with a minimum of 1 TWD; Shin Kong Securities provides a minimum discount of 10% with a minimum of 1 TWD; and Uni-President Securities offers a 1.68 discount rate with a minimum of 1 TWD.

Using Fubon’s 1.8 discount rate, the TSMC purchase fee would be about 153.63 TWD. It is recommended to consider odd lot trading only when investing over 10,000 TWD, as otherwise, the fee ratio becomes too high.

Hidden Cost Reminders

Besides brokerage fees, some brokers may charge additional service fees, making the overall cost higher than full lot trading. It’s advisable to compare multiple brokers before opening an account.

Practical Solutions for Unsold Odd Lots

Solution 1: Convert Odd Lots to Full Lots, Leverage the High Liquidity of Full Lot Trading

This is the most effective way to solve “odd lots can’t be sold.” For example, with Xinjing (1582.TW), suppose an investor holds 700 shares and cannot sell them during intraday trading. They can buy an additional 300 shares after hours to reach 1,000 shares (one lot), then sell all at once via full lot trading the next day.

The advantage of this method is that full lot trading has much higher volume than odd lots, with nearly 100% chance of execution, and only involves the additional cost and transaction fee for buying 300 shares.

Solution 2: Precise Price Setting Strategy

During after-hours trading, since only one auction occurs per day, investors need to set prices more strategically:

• Urgent to sell: Place a sell order at the limit-down price. According to the maximum transaction principle, the limit-down price usually gets priority.
• Want to buy: Place a buy order at the limit-up price. Similarly, based on the maximum transaction principle, this has the highest success rate.

This method is suitable for investors with clear judgment of the stock but involves the risk of prices deviating from expectations.

Solution 3: Submit Orders in Segments and Retry the Next Day

If orders are not filled during the day, it’s recommended to resubmit immediately after hours. If still unfilled, wait until the next intraday session to try again. Sometimes, trading volume fluctuates significantly due to news, limit-ups, or limit-downs; patience can improve the chances of execution.

Pros and Cons of Odd Lot Trading

Main Advantages

Significantly lowers the capital threshold, allowing investors with limited funds to participate in the stock market. It’s suitable for regular savings plans, requiring no large upfront investment. Investors can “test the waters” with small amounts on popular stocks, reducing learning costs.

Disadvantages to Note

Lower liquidity leads to longer matching times; minimum fee restrictions make small investments costly; odd lots can only be sold, not bought, limiting flexibility; converting odd lots to full lots has time limits, after which it expires.

Because odd lots are often incidental, if brokers lack inventory, investors may not be able to buy the desired quantity of odd lots.

Special Reminder: Opening Accounts and Platform Selection

Buying and selling odd lots is the same as full lots, just switch to the “Odd Lot Trading” mode on the broker app. When placing an order, change the “lot” unit to a specific number between 0-999 shares. When opening an account, prepare ID card, secondary ID (health insurance card or driver’s license), and personal bank account.

It’s recommended to compare each broker’s minimum fees, electronic order discounts, and customer service quality before deciding where to open an account.

Summary: Participate Rationally in the Odd Lot Market

With the opening of intraday odd lot trading, Taiwanese investors now have sufficient tools to solve the “odd lots can’t be sold” problem. By mastering correct trading timing, understanding cost structures, and learning advanced techniques like converting odd lots to full lots, odd lot trading can become an effective way for small investors to steadily accumulate assets.

Always assess your own risk tolerance, understand basic investment analysis methods, and stay rational to avoid impulsive trading. Only then can you achieve stable profits in the odd lot market.