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I have been looking at the stock market and have noticed that the smallest number of shares in one trade is 100, is it possible to buy/sell less than 100 shares in one trade?
Thanks in advance
lfree6
Um... You might be talking about options contracts. Most brokers allow you to buy less than 100 shares. Now depending on how much the stocks cost, comissions will really eat into one hundred shares...
Most trading is done by large, institutional investors. They usually buy massive blocks of shares, and round their purchases to the nearest 100 shares, known as a "lot" or "round lot."
One can, however, purchase less than 100 shares -- even just 1 share (and, through intermediaries like Sharebuilder or DRIPS, fractions of a share).
It's a wierd practice to buy 100 shares.
It makes much more sens to buy for $1000 or whatever round number in dollars.
You have two options. You can open up a Sharebuilder account and buy fractional shares or you can buy a mutual fund that owns a variety of stocks that is in $ amount too.
Option contracts gives you the right to buy or sell 100 shares of stock. So if you want to write an option, i.e. a covered call, you need to own 100 shares of stock to sell 1 option contract against it.
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