Trading fractional shares allows you to invest in companies which you may not be able to afford the full share price. It also makes it easier for you to diversify your portfolio by allowing you to trade fractional amounts in multiple companies when you otherwise may have only been able to trade whole shares in one or two companies.
If you enable your account to trade in fractions, you may buy a fraction of a share based on the amount of cash you specify. For example, if you want to spend $500 but one share of the stock you want to buy is currently $1000 you would end up with 0.5 shares. If you would like to short a fractional share, you can do so by specifying the fractional share quantity (for example, sell .25 shares).
Note
- Fractional share purchases are allowed through the Dividend Reinvestment Program (DRIP).
Additional Information