The Odd Lot Theory is an investing strategy that suggests that small individual investors who buy or sell stocks in quantities that are not a multiple of 100 (i.e., odd lots) are typically wrong in their investment decisions. According to this theory, odd lot investors tend to be uninformed and often buy or sell based on emotions, rather than solid investment analysis. Therefore, the odd lot activity can be used as a contrarian indicator, where the market may move in the opposite direction of the odd lot investors.

The Odd Lot Theory was first proposed by Joseph Granville, an influential technical analyst in the 1960s and 1970s. Granville observed that the odd lot investors tended to buy or sell stocks at the wrong time, usually during market peaks or troughs. He argued that this was due to their lack of knowledge about the stock market and their tendency to follow the crowd.

Some market analysts still use the Odd Lot Theory to predict market trends. However, others argue that the theory is outdated and no longer relevant in today's market, as the number of odd lot investors has decreased due to the rise of electronic trading and the increasing popularity of index funds.