Odd lots, referring to stock transactions that involve quantities of shares that are less than the standard trading unit, typically have a minimal impact on liquidity in the stock market. Liquidity in the market refers to the ease with which assets can be bought or sold without significantly affecting their price. In the case of odd lots, their relatively small size means that they represent only a small portion of overall market activity.

Since odd lots are often executed by individual retail investors rather than institutional investors or market makers, they tend to have less influence on price movements. Institutional investors and market makers typically engage in larger transactions, known as round lots, which can have a more substantial impact on liquidity and price discovery.

However, while odd lots may not directly contribute significantly to market liquidity, they still play a role in providing opportunities for individual investors to participate in the market. Moreover, the aggregate volume of odd-lot transactions can contribute to overall market activity, albeit to a lesser extent compared to larger transactions.

In summary, while odd lots may not have a significant impact on liquidity in the stock market individually, their collective presence adds to the overall market dynamics and provides avenues for retail investors to engage in trading activities.