Do you buy fractional shares?

I can’t decide. It would seem that fractional shares are harder to sell because you need a counterpart that wants your exact fraction to make the trade. I don’t know the impact on taxes etc (if it makes it more complex or not)

So what do you think? Buy fractional shares or keep whole numbers of shares and leave 1–2% leftover in cash every month?

When you sell (in 20-30 years?) you can surely sell whole number of it.

But the effect of having 20 usd sitting for a month in your account will matter very little for your profits.

Do fractions combine to make full shares? What I mean is if I buy 0.4 shares in one transaction and then 0.6 shares in another, I own 1 share. When I want to sell, do I need to find a counterpart for 0.6 shares and for 0.4 shares, or for 1 full share?

Sorry my “surely” is just my conviction. I would suppose so, but never thought of doing that as it doesn’t make much sense to me.

Pretty sure the tax software does not allow to list fractional shares as of now. Do you round it down/up to the nearest natural number? 0.499 shares of BRK.A may be a nice way to hide some money :slight_smile:

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Through my ESPP I kept buying fraction of shares for years, same with dividend auto re-investing. Never had issues selling fraction of shares - why should there be an issue? To sell an asset, price matters, not the quantity :wink:

I think it’s because it’s much easier to find someone to buy your whole 1 share than to find someone who wants exactly the 0.45362 of a share that you now want to sell, maybe?

Fractional shares are something that your broker (not stock exchange) handles as a service. I.e. if you buy 0.1 Shares, they somehow have to get one whole share and keep the other 0.9 for when someone else wants another piece.

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I am not buying them. I don’t see any real advantage in comparison with the complexity.

It lets you buy exactly the amount of currency you want instead of having a couple hundred dollars sitting as cash because it was not enough to buy another whole share.

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Amazon is trading at 3000+, Fractional shares are the only way I can buy

I don’t buy fractional shares as I don’t see an advantage to it and my broker doesn’t offer it anyway. Whatever amount my optimization spit out, just round it up or down, depend on my budget. You are not considered as an owner of the stock in a traditional sense, so I don’t know if dividend is divided accordingly among owners.

Exactly.

Because - as Double_A already said above - it’s just a “proprietary” service your broker offers.

They’ll only sell full shares at the exchange, not fractional shares.

At least two brokers I’ve been using split the sale order between full and fractional shares. Both let me (only) sell all my full shares with an online trading order - yet both retained the remaining fractional shares on my account. One made me print out, sign and e-mail them a separate instruction to dispose of the fractional share - at a separate transaction date and different price. The other, I just relinquished them altogether when closing the account before the end of the year. I’m sure I didn’t have to but it would have delayed things otherwise.

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