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How Much Stock to Buy and How to Buy It 52 In addition, there are a number of shares that trade in round lots of 10, which are known as cabinet stocks. Before you get too excited about cabinet stocks though, you should know that cabinet stocks trade in groups of 10 primarily because of their astronomical share prices. Prices for shares of cabinet stocks (their names are unfamiliar to the average investor) are usually in the range of tens of thousands of dollars and therefore priced out of reach of average investors. This type of stock is usually traded only between high net worth (wealthy) individuals and/or institutions. In addition to paying fewer service charges and gaining more cost-efficiency, purchasers of round lots usually have the advantage of lower prices per share. This practice sounds a little unfair to the smaller investor because the "richer investors" get lower prices, but it makes more sense when you consider the paperwork and employee time consumed by subsequent purchases rather than one round-lot purchase. As a smaller investor who wants to buy in round lots, you can do one of two things: · Keep depositing into your brokerage account until you have enough to buy the round lot. · Group together with other smaller investors to purchase the round lot. Should you be fiercely independent or not have any friends, perhaps you should consider purchasing in odd lots. Should you decide to save money in your brokerage account, be sure and ask what types of financial products are available in which you can park your money until you use it to initiate a trade. Virtually all brokerages offer money-market products such as mutual funds, with which investors can earn interest on money not currently being used. If you don't ask, you run the risk of losing possible interest payments. Tip Purchasing stocks in round lots through pooling its members' funds is an advantage in-