One question I had when starting out was whether I had to buy 100 shares of a company’s stock or if I could buy fewer. Most of the investing books I read were written in the days when shares were traded manually by people, not electronically by computers. They kept talking about “odd lots” and penalties and making it sound impossible or immoral to buy or sell fewer than 100 shares at a time.
Written: 2012
Revised: 2023
Reviewed: 2023
You Can Sell or Buy the Number of Shares You Want
With most discount online brokerages, you can now sell or buy the number of shares you want. The number of shares does not have to be a multiple of 100. You can buy or sell 1 share!
Testing the Theory with BMO InvestorLine
Since I never believe anything completely until I’ve tried it, I did try to sell 18 shares of Canadian Utilities. I experimented using my BMO InvestorLine account. The sale went through perfectly. And, yes, I made a tidy (little) profit!
Commissions and Fees May Be High for Small Share Sales and Purchases
Most customers pay a fee each time they buy or sell shares. For example, at some Canadian online brokerages for customers with small accounts, the fee is about $7-10 as of January 2023 (It was $29 in October 2012!) for each sale or purchase of shares in one company.
So if you buy 1 share, you pay about $10. Or if you buy 1000 shares, you pay about $10.
If these fees are relatively high compared to the growth in value of the stock they may limit your ability to diversify your holdings. For instance, if you have to pay $10 for each type of shares you buy, you may not be able to afford to buy shares in 10 different companies in 10 different types of business.
Beware of Paying Extra Fees When Buying or Selling Odd Lots Across Several Days
Another problem can arise if you buy or sell shares in quantities that aren’t multiples of 100. For instance, say you want to buy or sell 129 shares.
Most brokerages trade shares in “lots” of 100 shares. So first you might “fill” your order to buy/sell 100 of your 129 shares. Then another person might finish by buying/selling your other 29 shares.
If both those transactions happen on the same day, your brokerage will only charge you one commission fee. But if they happen over 2 days, you will get charged a commission fee on each day. So instead of costing you $10 it could cost you $20 to completely buy or sell those 128 shares.
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