A Quick Start Guide for Beginners in Fractional Share Investing: Intraday Fractional Share Selling Tips, Trading Hours, and Cost Analysis

Why Are Small Investors Engaging in Odd-Lot Trading?

Trading in odd lots has become an essential part of personal finance for small investors in Taiwan. Compared to traditional full-lot investments that require an initial investment of tens of thousands of NT dollars, odd-lot trading has a much lower barrier—starting with just 1,000 NT dollars. However, many beginners still have limited understanding of intraday odd-lot selling timing, methods, and costs.

In simple terms, odd lots refer to stocks less than 1,000 shares (1 trading lot), with a minimum trading unit of 1 share. They are usually generated in situations such as unfilled orders, stock distributions, or investors actively breaking down holdings.

Odd-Lot Trading Schedule: Seize the Golden Opportunity for Intraday Odd-Lot Selling

After October 2020, odd-lot trading expanded from purely after-hours trading to include intraday trading, greatly increasing trading flexibility. Below is the complete schedule:

Advantages of intraday odd-lot selling include higher trading frequency (matching every minute), offering more chances to transact than after-hours. Note that intraday trading can only be done via broker apps or trading platforms electronically; phone or manual orders are not available. If not filled during intraday, the order is canceled and must be resubmitted.

After-hours trading only involves one matching session but offers phone manual order options, suitable for office workers placing orders before market close.

Calculating Odd-Lot Transaction Fees: Beware of Hidden Costs

The fee calculation for odd-lot trading is identical to full-lot trading—0.1425% of the buy or sell amount—but brokers set minimum fee thresholds.

Example calculation:

Suppose buying 200 shares of TSMC (latest closing price NT$1,065):

• Basic fee: 200 × 1,065 × 0.1425% = NT$303.53
• With a 50% discount from the broker: NT$303.53 × 50% = NT$151.77

Comparison of major brokers’ odd-lot trading costs:

Key tip: When total transaction amount is below NT$10,000, the fee proportion is significantly higher. It’s advisable to accumulate a certain amount before trading.

How to Improve Intraday Odd-Lot Selling Success Rate? Practical Tips Revealed

Case Study: The Dilemma of Selling Less Popular Stocks

Investor A holds 700 shares of Shin Jin (1582.TW). Since Shin Jin is not a mainstream trading target, intraday orders may face difficulty in execution. For such cases, the following solutions are recommended:

1. Break Down to Whole Lots Strategy

If intraday odd-lot quotes show large sell orders piling up without execution, you can:

• Buy an additional 300 shares of Shin Jin to reach 1,000 shares (1 lot)
• Switch to full-lot trading mode for selling, as full-lot trading is more active and has a higher chance of execution

This method is especially suitable for intraday odd-lot selling of less popular stocks.

2. After-hours Extreme Price Orders

Since after-hours odd-lot trading only involves one closing auction at 14:30, if you are determined to execute a trade, you can:

• For selling: Place a sell order at the limit down price, maximizing the probability based on the principle of maximum transaction volume
• For buying: Place a buy order at the limit up price, similarly increasing the chance of execution

The risk is that the trade may be executed at an extreme price, suitable for investors eager to clear their positions quickly.

3. Batch Orders Method

If a single order of 700 shares remains unfilled, you can split it into multiple smaller orders to increase the chances of being matched.

The Pros and Cons of Odd-Lot Trading

Advantages:

• Low Entry Capital: Starting from NT$1,000, ideal for small investors testing the waters
• Dollar-Cost Averaging: Distribute investments over time to reduce risk
• Flexible Trading Hours: Both intraday and after-hours options available, suitable for working professionals
• Rights and Benefits: Odd-lot holders can enjoy dividends, stock distributions, and participate in rights issues

Disadvantages:

• Lower Liquidity: Fewer trades, longer matching times
• High Transaction Cost Ratio: Minimum fee system makes small trades relatively expensive
• Selling Restrictions: Must sell all at once; partial sales are not possible
• Liquidity Concerns for Less Popular Stocks: Selling less popular stocks intraday may take days without success

Other Small Investor Investment Options Comparison

If concerned about liquidity and fee issues in odd-lot trading, consider:

CFD Trading (Contracts for Difference)

• Require only 5-10% margin, high capital efficiency
• No commission, only spread costs
• Suitable for short-term traders, but involves daily settlement and overnight interest
• Higher risk, requiring disciplined trading

Common FAQs for Beginners

Q: Can odd lots pay dividends?
A: Yes. Odd-lot holders are still shareholders and entitled to dividends, usually paid as cash.

Q: Will unfilled intraday orders carry over to the next day?
A: No. Unfilled intraday orders are canceled if not executed; after-hours unfilled orders do not carry over to the next day.

Q: Must I go through a broker to buy or sell odd lots?
A: Yes. All odd-lot transactions must be conducted through a licensed securities broker.

Summary and Investment Recommendations

Odd-lot trading has become an important way for the general public in Taiwan to participate in the stock market. Compared to traditional full-lot investments, odd-lot trading offers clear low-threshold advantages, but investors must understand its complex mechanisms—especially regarding intraday odd-lot selling timing, fee calculations, and liquidity risks.

To profit in the odd-lot market, key points are:

1. Make full use of intraday trading hours rather than passively waiting for after-hours
2. Choose actively traded stocks or use techniques like breaking down to whole lots to improve success rates
3. Strictly control transaction costs to prevent fees from eroding profits
4. Maintain a long-term investment mindset and avoid being swayed by short-term fluctuations

Mastering these aspects, odd-lot trading can become a powerful tool for building your portfolio and accumulating capital.