Investor's wiki

Board Lot

Board Lot

What Is a Board Lot?

A board parcel is a standardized number of shares defined by a stock exchange as a trading unit. Much of the time, this means 100 shares.

A board parcel is what the exchange decides to be a round lot. The purpose of a board parcel is to limit trading "odd lots" and to work with more straightforward trading. It's more challenging for a broker to track down a buyer for, say, 17 shares, in the event that everyone consents to trade in 100 share parts. With the approach of efficient online trading and fractional shares, notwithstanding, odd part trading is less of an issue than it has been in the past.

Understanding Board Lots

The size of a board parcel will change. A stock exchange could characterize one board part as rising to 1,000 shares for stocks priced under $1, and 100 shares for shares valued at more than $1. The reasoning is that standardization increments liquidity, hence bringing down spreads and making the market more efficient for everyone.

More tight spreads and greater liquidity leads to bring down transaction cost, which investors of all assortments like. Albeit most securities bookkeeping today is done electronically, fractional ownership rates actually represent an administrative burden. Thusly, economies of scale favor security parts to come in bigger augmentations.

At some trading scenes, the board part is outlined in units of 100 shares. On different exchanges, the board part size can be a lot higher. For example, the standard board part at the HongKong Exchanges and Clearing Limited (HKeX) was changed from 8,000 shares to 24,000 shares in

Feb. 2019.

For certain hedging applications or other further developed trading strategies, buying or selling in augmentations of 100 may be poor; in these occasions, it could seem OK for an investor to utilize a full-service broker to dial in the right amount of securities โ€” no more and something like what is required.

It is entirely expected for voice or discount brokerages to limit users to round parcels as part of their service agreements. Online brokerages and electronic trading, nonetheless, have consistently diminished the failure and cost associated with odd parts. Thus, the requirement for board parcels has diminished emphatically throughout the last decade.

Illustration of Board Lots

In contrast to the U.S., where board parcel sizes are regularly standardized to 100 shares, the Toronto Stock Exchange (TSX/TMX) has variable board part measures that are dependent on the price of the security. They are defined in the Universal Market Integrity Rules (UMIR) that oversee trading rehearses in Canada.

The rules are as per the following: If the trading price per unit is under $0.10, the board part size is 1,000 units. On the off chance that the trading price per unit is $0.10 to $0.99, the board parcel size is 500 units. While the trading price per unit is $1.00 or more, the board part size is 100 units.


  • Board parcels can lead to more tight spreads and greater liquidity, albeit electronic trading and online brokers have decreased the requirement for board parts.
  • The thought behind board parcels is to work with more efficient trading by characterizing blocks of shares for trading, rather than having a random assortment of odd parts being traded.
  • A board part is what a stock exchange decides as its standard trading unit for round parcels.