The most basic to know before trading stocks, the minimum shares to transact on stock market; buy and sell. Trading stocks or equity is simply done by referring to this board lot system. It determines the number of shares can be purchase or sell at a specific price range.


This means that the minimum amount needed to invest in the stock market will just varies on the current market price with respect on the board lot system. The main purpose to have this board lot system is to avoid odd lots and to be much easier to trade. As for the stock broker, it would be difficult to find buyers for a odd share, example is to purchase or sell 16 shares than 10 or 100 shares.

Any shares that didn’t fit or smaller than a board lot is considered an odd lot. Based from the below chart, trader can purchase or sell at range ten (10) shares to one million shares.

Board Lot Table:

 

 

PRICE

MINIMUM FLUCTUATIONS

BOARD LOT

         0.001     to    0.0024

       0.0002

1,000,000      

         0.0026   to    0.0050

        0.0002

1,000,000      

         0.0055   to    0.0100

        0.0005

1,000,000      

         0.0110   to    0.0250

        0.001

100,000      

         0.0260   to    0.0500

        0.001

100,000      

         0.0525   to    0.1000

        0.0025

100,000      

         0.105   to    0.2500

        0.005

10,000      

         0.2600   to    0.5000

        0.01

10,000      

         0.5100   to   1.000

        0.01

10,000      

         1.020     to   2.500

        0.02

1,000      

         2.550     to   5.000

        0.05

1,000 ** 

         5.10       to   10.00

        0.10

1,000  *  

         10.25     to   25.00

        0.25

100      

         25.50     to   50.00

        0.50

100      

         50.50     to   100.00

        0.50

100      

         101.00   to   250.00

        1.00

10      

         252.50   to   500.00

        2.50

10      

         505.00  and  up

        5.00

10      

 

 



For example, if an investor wishes to buy a stock of Manila Electric Company (MER). Last closed price is Php174.0/s, the minimum share you can purchase is 10, that means the amount is Php1,740.00 with no broker’s fee and tax included. At PSE website, we see also this data per company; see above photo.

The trader or investor still can manage to purchase shares smaller than the minimum or little higher than the board lot stated. Like instance at MER, still have way to buy or sell 6 shares by declaring it as an odd lot. But the disadvantage by this transaction is that the seller might sell it at a lower price than the current market price, since only few buyers you can find willing to buy odd lot shares. But unintentionally, an investor or trader may have this odd lot shares, like instance when the company (MER) will declare stock dividend for example, 15%. At this dividend, the investor will expect to receive 15 additional shares from 100 shares holdings.