A Complete Guide to Odd Lot Trading: Understand the Differences Between Intraday and After-Hours in One Go, Essential Entry Strategies for Small Investors

Partial Share Investing has become a new investment option for small investors in Taiwan in recent years. However, many beginners still have limited understanding of the intraday and after-hours trading sessions, including time schedules and fee calculations. This article will delve into the core knowledge of partial share trading to help you get started quickly.

What Are Partial Shares? Why Do They Exist?

The minimum unit for full share trading is 1 lot (1000 shares), but investors sometimes hold less than 1000 shares, which are called partial shares. The minimum trading unit for partial shares is 1 share, typically arising from:

• Unfilled orders leaving residual shares forming partial shares
• Scattered shares generated during stock distribution
• Investors actively purchasing partial shares for small-scale investments

Partial share buying and selling are specifically for stocks less than 1000 shares, with each order limited to within 999 shares, suitable for investors with limited funds.

The Big Difference Between Intraday and After-Hours Trading: Timing is Key

Starting October 26, 2020, investors can trade partial shares not only after hours but also during intraday sessions. Understanding the differences between intraday and after-hours trading is crucial for increasing transaction success:

Intraday Trading Session (9:00-13:30)

• Order placement time: 9:00 AM to 1:30 PM
• Order method: Only through electronic orders (broker trading platform)
• Matching method: First match at 9:10 AM, then every 1 minute via call auction
• Order execution priority: Price priority, then submission time at the same price

After-hours Trading Session (13:40-14:30)

• Order placement time: 1:40 PM to 2:30 PM
• Order method: Electronic orders or manual phone orders
• Matching method: One call auction at 2:30 PM
• Order execution priority: Price priority, then random arrangement by computer at the same price

Important difference to note: Unfilled orders during intraday trading are not automatically carried over to after-hours; investors need to resubmit. Unfilled orders after hours will be automatically canceled and will not carry over to the next trading day.

Rights and Protections for Partial Share Holders

As part of the shareholders, partial share owners enjoy the following rights:

• Dividend eligibility: Can receive dividends (smaller amounts)
• Dividend collection: If holding less than one share, can be cashed out or combined for distribution
• Trading freedom: Can freely buy and sell partial shares without special restrictions

How Are Partial Share Trading Fees Calculated?

The fee calculation for partial shares is identical to full shares, both at 0.1425% of the transaction amount, but each broker has a minimum fee standard. For example, purchasing 200 shares of TSMC (2330.TW) at a current price of 1065 NT dollars:

Fee calculation: 200 × 1065 × 0.1425% = 303.53 NT dollars

If enjoying a 50% discount: 303.53 × 50% = 151.77 NT dollars

Major Broker Fee Comparison Table

Practical Trading Tips for Selling Partial Shares

Since trading volume for less popular stocks is lower, investors may face difficulties in executing trades. The following tips can improve success rates:

Convert Partial Shares to Whole Shares Strategy

If intraday partial share quotes show a buildup of sell orders, you can buy additional partial shares to reach a full lot (1000 shares), then quickly sell the full lot through active market trading. For example, holding 700 shares of Shin-Kong (1582.TW), you can buy 300 more shares to make a full lot, then sell via the more liquid full lot market.

Extreme Price Orders Method

Given that after-hours trading only involves one call auction:

• Urgent buy: Place a buy order at the limit-up price to prioritize execution under maximum transaction principles
• Urgent sell: Place a sell order at the limit-down price to increase the chance of execution

Timing Selection

Choose appropriate timing for order placement during intraday and after-hours sessions. During intraday, multiple matches can improve success; after hours, leverage the single call auction to judge the best price.

Pros and Cons of Partial Share Investing

Advantages

Low Entry Barrier: Small capital requirements, suitable for regular savings plans, allowing small investors to participate in the stock market

Low Cost of Testing Waters: No need for large capital, enabling learning and investing simultaneously

Disadvantages

Limited Liquidity: Lower trading volume than full lots, possibly longer transaction times

Relatively Higher Fees: Minimum fee restrictions mean small trades have a higher proportion of costs, which can erode profits

Operational Limitations: Partial shares can only be sold, not bought; must sell entire lot at once; exchanging partial shares for full lots has time restrictions

Alternative Options for Small Investors

If concerned about liquidity and fee issues with partial shares, Contracts for Difference (CFD) offer another choice. CFDs allow trading stock price movements with small margin deposits without holding physical shares:

Advantages:

• Low margin requirements (around 5%), significantly reducing entry capital
• Transparent spread costs, no additional commissions
• No liquidity issues

Disadvantages:

• Suitable for short-term trading, settled daily
• Overnight positions incur interest charges
• Not suitable for long-term holding strategies

For example, buying 5 shares of Google reduces the actual expenditure from $2000 to $100, greatly lowering the entry barrier.

Summary

Partial share trading has become a mainstream choice for Taiwanese investors, offering more flexibility and convenience compared to traditional full lot trading. Mastering the differences between intraday and after-hours trading, applying practical trading techniques, and understanding fee structures are essential for beginners.

Before investing, assess your risk tolerance, learn basic investment analysis, maintain rational decision-making, and avoid blindly following trends. Only then can you steadily profit from partial share trading. Whether choosing partial shares or other trading tools, continuous learning and risk management are the foundation of successful investing.