The ratio of odd-lot purchases to odd-lot sales:

Odd-lot index = odd-lot purchases/ odd-lot sales

Volume is typically expressed in shares instead of dollars. But some analysts occasionally express it in dollars for procedural reasons (exchange-specific procedures). This ratio ranges normally between 0.40 and 1.60. In general, it is indicative of popular opinion (literally, contrary opinion): observe what losers are doing and then follow an opposite course of action. In an upward market trend, odd-lot traders react by selling part of their holdings, but as the market continues its upward movement small traders try to make large profits by taking long positions (i.e., they become net buyers), without realizing that the market is heading for a fall.

For example, suppose for a given period, odd-lot purchases were 5,000,000 shares while odd-lot sales were 10,000,000. The odd-lot index is thus 0.50. If this index was 1.1 for the previous period, then investors should now purchase securities because odd-lot traders are selling.