Taiwan Depository & Clearing Corporation

Overshadowed by Russia’s war in Ukraine, stoking inflation, and the US Federal Reserve’s interest rate increases at the beginning of the year, the Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX) had kept plunging from 18,000 points to below 13,000 points. Just recently, TAIEX recouped losses to close at around 14,000 points. Odd lotters have gradually made their investing moves to target stock options with better quality and potential. The Big Data and Analytics Application Platform, created by the Taiwan Depository Clearing Corporation (TDCC), observed 878,000 investors trading odd lots in October, an increase of 6.6% compared to 824,000 investors in January this year.

A deeper dive shows that women account for 54% of these investors while men are around 46%. Women are more likely to buy odd lot stocks. However, the average monthly turnover per person of men is NT$48,000, higher than NT$39,000 completed by women.

Analyzing the TDCC data by the number of odd lotters sorted by the underlying stock, the results indicate that Taiwan Semiconductor Manufacturing Company (TSMC) shares were most favored by odd-lot traders. From January to October 2022, the overwhelmingly dominant player had attracted 917,000 investors to enter into odd lot transactions—613,000 people more than that of the second best front-runner, Yuanta/P-shares Taiwan Top 50 ETF. The data also found that the ten most popular stocks among odd lotters were usually large-cap stocks or ETFs with great tracking quality and consistent performance, attracting investors to buy the dip.

Odd lot trading not only lowers the investment threshold for investors to buy shares in the highest-priced blue-chip stocks, but it also helps them buy stocks over time. This approach can also be seen as the best touchstone for novice investors to gain hands-on experience and learn from their lessons. TDCC Senior Executive Vice President Kuang-Hui Chen pointed out that the senior generation has increasingly become dependent on the younger generation following behind it as the average life expectancy increases. The unexpected surge in inflation also cuts purchasing power in real terms. TDCC encourages people in Taiwan to start investing a little in stocks over time through odd lot trading as early as possible to build their assets and prepare for life after work.

Most Bought Stocks Among Odd Lot Traders