The fractional trading has been around for sometimes, but many are still dragging their feet to use it.
One of the reasons is because investors and traders do not know which brokers offer the fractional share investing platform. Others do not yet fully understand what is a fractional share dealing.
At the end of this article, one will have a clear understanding of the fractional share investment, its advantages and how to find a broker that provides that service.
Who Can Use Fractional Share Trading And Investing?
One may argue and say: "well that is not for me. Or I am not very sure about that" and so on. Do not worry yet.
Really, anyone who can open a trading or investment account can use the fractional share dealing. Now, the question is does your broker provide the fractional share dealing? If yes then feel free to use it if that is for you.
In general, the fractional share dealing is for investors of all ranges that want to own a fraction of a share because one can not afford to pay for one. That is really a great opportunity, and I will come back to that shortly.
What Is Fractional Share Dealing
The fractional share investment and trading tool allows one to purchase a fraction of one share at the time when one can not afford (or does not have the means) to pay for the price of one share.
For example, a stock X is $1000 per share, but one can not afford to spend $1000. At the same time, one wants to just own a fraction of that share.
Normally, most brokers do not offer that option. Either one buys one, two, three or more shares in whole or one stays out.
Well, that was the case in the old days. Not anymore.
Nowadays, an investor or technical trader can buy 0.10 or 0.27 or 1.34 or any other odd number of share just by using the fractional share investing.
Have you been dreaming about owning some of the juicy dividends paying companies or blue-chips stocks? Today, one can buy and hold a fraction (I mean any fraction of one share) of Apple Computers, Google, Amazon and so on at ridiculous prices.
Did you ask really? Yes.
With the fractional share, one can spend as little as one Dollar or less to purchase a fraction of a big or expensive share.
On this day of February 2020 when I am writing this article, one can buy 0.10 of one share of Virgin Galactic at $2.5. That is 0.10 x $25 = $2.5.
Now, you understand what is a fractional share trading and investing. Both technical traders and investors can take advantage of the fractional share dealing. The old excuse of saying: "I can not afford that stock, it is too expensive" is now unacceptable.
Advantages Of Fractional Share Trading And Investing
1/ Anyone with two, three or more Dollars can buy a fraction of an expensive stock. 2/ There are no restrictions on the oddness of the fraction one wants to buy or sell. One can decide to buy 3.14 or 0.002 or 0.123 or 1.618 of one Apple Computers stock or any other company's share. 3/ One can earn a nice dividend just for the sake of holding a fraction of an expensive share of a dividend paying company. 4/ One can decide to gradually buy into (build a stake) a company bit by bit without breaking the bank. 5/ It makes it possible for small investors to invest without any more restrictions. 6/ One can trade or invest in any financial instrument using the fractional share dealing. 7/ There are brokers that offer commissions free fractional share dealing. That is a game changer. 8/ It is also a great opportunity to teach youngers how to invest, and be interested in risk taking and control from the early age. 9/ The fractional share trading and investing is also an excellent tool for those who want to try or test financial markets strategies either for professional or personal purposes. 10/ At the time of this writing, a UK citizen can use fractional share investing for an ISA account tax free.
How To Find A Fractional Share Dealer Or Broker
Today in 2020, I am a fan of trading 212 because it offers a free commission trading and investing (including ISA) platform with the fractional share dealing facilities. The orders are executed without delays. I can not ask for more. I hope they stay around for a long time and continue to deliver an amazing service in the financial markets.
One can also just Google search for the terms: best fractional share brokers today. Once one has gathered the best brokers, it is paramount that one only uses those that provide commissions free dealing (unless there is none).
Warning I do not recommend the fractional share dealing to gamblers or crazy speculators.
Though, one can safely use the fractional share dealing for trading (short term), today, I only use it for investment purposes . When one is investing for the long term, it is better to invest in a dividend paying company. Those are my opinions.
Is there anything else, I have not yet discussed? I think I have said enough already.
The fractional share trading and investing must not be looked upon as an instrument tool for small investors only. It is for all investors and traders of all walks. It has many advantages and has tremendously changed how one can invest in the financial markets.
Though traditionally, the minimum share, one can buy or sell is one, the fractional share dealing has now removed all restrictions. All one needs today is to find a broker that provides that service. The icing on the cake is that some brokers do provide that service commission free.
I hope this article has opened your investor's eagle eyes. If that is true for you, then feel free to bookmark and share it today. I will appreciate it also if you can say few good words about us in various trading or investing forums.
I wish you the very best in your trading and investing.
This article is written by G Beaulieu Founder Of Stochastic-MACD.Com