What are Fractional Shares?
Fractional Share trading gives you the ability to purchase an equity position with a quantity of less than one whole share. Instead of having to buy a security in full share increments this allows you to purchase a piece of a stock for an amount that you feel comfortable with. Webull offers fractional shares for most stocks and ETFs that are available on our platform.
Why do people trade fractional shares?
There are many high-priced stocks that are trading for hundreds and even thousands of dollars per share. Someone with a limited amount of capital may have difficulty choosing which investments make sense for them. Fractional share investing eliminates this constraint by allowing you to invest with as little as $5. The ability to purchase fractional shares lowers the barrier of entry into the stock market which creates opportunities for investors at every level.
In the event of a stock split you may receive fractional shares of a security depending on the terms and conditions of the split. For example, if you held 10 shares of a security that experienced a 1:7 reverse stock split then the quantity of your position would be adjusted into 1.42857 shares. If you hold an equity position with fractional shares included and the underlying security pays out a cash dividend you would be eligible to receive a dividend payment for the fractional shares held. However, for shareholder rights only whole shares would be eligible for proxy voting and the fractional piece of the position will not have any voting ability.
Guidelines for Fractional Trading
1) Fractional share trading is only available for certain stocks and ETFs. The fractional share (F) logo will be displayed on the detail page indicating if a particular security is supported for fractional trading.
2) Fractional share trading is only available during regular trading hours which is 9:30-16:00 EST. Webull does not support extended hours trading for fractional shares.
3) Currently we only support market orders for fractional share trading.
4) There is a $5.00 minimum when purchasing a fractional share position and the number of shares must be greater than 0.00001. For selling a fractional position there is not a minimum dollar amount however the number of shares must be greater than 0.00001.
5) Short selling is not supported for fractional share trading.
6) Once a fractional trade has been entered you cannot modify the open order.
7) Fractional shares are not eligible for the Stock Lending Income Program.
How to start fractional share trading?
>Pick a stock that is available for fractional share trading. If fractional trading is supported for that security there will be a green diamond icon on the stock details page.
>Switch the order type to Market
>Tap the whole share button and switch it to fractional which would allow you to enter the quantity that you would like.
>Submit your order.
At this time, you cannot enter a dollar amount for a fractional order however we are working on optimizing this feature. If you are looking to have a fractional position with a whole share attached then the fractional order would need to be placed separately from the whole share order. For example, if your goal is to own 1.5 shares of ABC stock then you would need to buy one whole share and then place a separate order for the partial share of 0.5.
Disclaimer: You may not be able to transfer your fractional shares from one brokerage firm to another. Webull is currently limited to transferring fractional shares only to other brokerages who use Apex Clearing as their clearing house. Some popular examples of these brokerages would be: M1 Finance, SoFi, Stash, Wealthsimple, Betterment, Firstrade, Stockpile, and more. If your brokerage does not use Apex Clearing, you will need to liquidate the fractional portion of your position so that the assets can be sent as cash instead. If this is the case, you would only need to liquidate down to the nearest whole share, not the entire position.