I have 4.8 lots of Notion Vtec. Come November 3rd it is going to consolidate to 5 to 1.
Should I buy another 200 units, but hor it will cost me RM 100 for the share that i buy but the brokerage fees is RM 40.
or Should I sell now the 4.8 lots? Dilemma, dilemma.
Below is the ODD lots explaination.
Is there a minimum number of stocks for Purchase or Sales in Bursa Malaysia?
In Malaysia, the stocks or shares traded is done on per ‘LOT’ basis just like in many other countries. In Malaysia, One (1) Lot is equivalent to 100 units of shares. Therefore the minimum number of shares or stocks one can buy or sell in Bursa is 100 units of shares.
Any purchase or sales other than the 100 units is known as ‘ODD LOT’.
Bursa current system allow the quotes outside the equity trading system for the purchase or sale of Odd lot but the contract are matched on a ‘All or Nothing’ basis. It means for Odd Lot, if there is a seller trying to sell 7 units of shares and there is a buyer trying to buy 3 units of shares, the contract will not be matched. Only when there is a buyer willing to buy the 7 units of shares, the seller contract will be matched and done. The Odd Lot system is not part of the equity trading system therefore it doesn’t follow the normal price limit convention.
For example:
In Bursa Equity trading system, a counter A is currently being traded at RM1.00. In the Odd Lot screen, a seller can quote an Odd Lot price of RM20 for the sale of 10 units of shares. Its upto the buyer whether one is willing to pay for the price. And due to the current minimum brokerage of RM40 per contract, quoting the same price as Bursa Equity trading system, of RM1.00 in this example, will results in the buyer and selling paying more for the brokerages than for the actual stocks.
Let us come back to the current minimum quantity of 100 units of shares.
Not too long ago, One Lot was equivalent to 1,000 units of shares. That was when the stocks prices in Bursa were higher. Now a 100 units of shares could also end up having the minimum brokerage being higher than the 100 units of shares itself.
For example:
A counter B is being traded at RM0.20. If one is to buy 100 units of counter B at RM0.20 (or 20sen), the gross contract value is RM20 (100 units shares x 20sen). This is much lower than the minimum brokerage of RM40. In this scenario, the seller will end up with a “negative” sales contract. It means that the seller have to PAY for selling! So better be careful when one want to sell stocks that are currently traded below RM0.50 or below 50sen.