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Fractional Shares

Lesson 21 of 21

Duration 3:02
Level Beginner
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Clients can allocate a sum of money when investing in stocks rather than buying a specified number of shares. Since many share prices have increased in value over time, investors can buy relatively fewer shares than in years gone by. To help investors put money into stocks they wish to own, Interactive Brokers has created the ability to transact shares in fractional amounts.

To use fractional share trading clients need to permission their account to do so within Client Portal. Log in from interactivebrokers.com and select the head and shoulders icon to the upper right. Click on Settings and scroll down to trading and locate and click on Trading Permissions.

Select the icon for Stocks. Scroll to the bottom of the regions. Check the box next to Global (Trade in Fractions). Click the Continue button to the lower right of the screen. 

Fractional share trading is available for eligible US, Canadian and European stocks (and certain ETFs). The benefit to investors is that they can invest a small amount, say $100 and create a portfolio of several stocks, each of which has a share price higher than $100. In this case, the investor divides $100 equally across four names resulting in very small amounts of fractional shares in each. If the purchase price doesn’t result in a whole number of shares, IBKR buys (or sells) fractional shares for you.  

To create an order in TWS using fractional shares, in the Order Entry panel click within the quantity field and from the pop-up quantity selector choose the currency selection, in this case USD, rather than Shares. The user selects the amount to invest or types the desired amount directly into the input field. In this case the user types $100 into the field. The quantity field now displays QTY 100 USD. Next, the user chooses a time-in-force for the order. In this case since the user leaves the default Limit order in effect, he or she will specify the limit price to pay. When ready, the user clicks the Submit button. An order confirmation will appear and when ready, clicks Transmit to send the order. 

Don’t forget that you will need to enable fractional share trading permission within Client Portal to activate this feature. 

Resources:

Fractional Trading

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42 thoughts on “Fractional Shares”

  • Sattaya padpong

    Thank you

    • Interactive Brokers

      Thanks for engaging!

  • Anonymous

    I have an IBKR Pro account. I don’t seem to be able to enable fractional share trading permission. Is this option available to everyone in all countries?

  • Anonymous

    If I want say .25 shares of one stock or .50 shares of a stock in that exact amount, is that possible? I don’t want odd amounts of fractional shares.

    • Interactive Brokers

      Thank you for asking. Yes, it is possible to enter fractional shares for specific amounts. We hope this answers your question!

  • Sathish Kumar

    Can we convert all the fractional share of a company into whole share
    Eg : if we have 3 fractional share like 0.25 % , 0.50% , 0.25% . It will automatically convert into 1 whole share ?

    • Interactive Brokers

      Hello Satish, fractional shares will automatically convert into whole shares if you have enough fractional pieces to add up to a whole number. Please reach back out with any additional questions. We are here to help!

      • Anonymous

        Hello.
        Is this true for European ETFs as well?
        Will fractional portions of an European ETF automatically convert into one whole unit, once they add up?
        Thank you in advance.

        • Interactive Brokers

          Thank you for asking. Yes, this is also true for ETFs. We hope this answers your question!

          • Anonymous

            Thanks for getting back to me and clearing that up.

          • Apostolos

            If after investing for some time we reach the point that we accumulate enough to own a whole share or ETF, is that share or ETF than tranferable to another broker or can only be liquidated? Thank you in advance!

          • Interactive Brokers

            Hello, thank you for reaching out. Fractional shares will automatically convert into whole shares if you have enough fractional pieces to add up to a whole number. IBKR does not accept fractional shares through a position transfer. https://www.interactivebrokers.com/faq?id=61921218
            However, if it accumulates to a whole share, you should be able to make a position transfer. Please reach back out with any additional questions. We are here to help!

  • Miquel

    hi. Do you plan to make it accessible via API (e.g. with python code)? Currently it doesn’t seem possible.

  • Dylan

    What happens to dividends paid out fractional shares, for example if you have 0.5 share of a dividend that pays out 1USD do you also receive 0.5USD

    • Interactive Brokers

      Thank you for asking. Your fractional shares positions are eligible to receive dividends in the same manner as your full positions on the same stocks. The formula is the position quantity multiplied by the dividend rate (ie. 0.85 shares x 0.75 dividend rate = $0.6375). https://www.interactivebrokers.com/faq?id=84609891

  • Erick

    Not sure but I believe extra ECN fees may be charged when using fractional shares…something to look out for.

  • Kun Zhang

    Hi, just wanted to ask what happens if I disable fraction share feature:
    1. if I have existing fraction shares, will I able to sell the fraction shares?
    2. I have recurring investment setup, will these recurring investment be buying whole shares instead of fraction shares?

    • Interactive Brokers

      Thank you for reaching out. If you disable fractional share trading, you will still be able to sell any existing fractional share positions in your account. For any recurring investments that were previously purchasing fractional shares, disabling this feature will result in those investments purchasing whole share quantities going forward. We hope this answers your question!

  • Anonymous

    Can I trade fractional shares using any type of order, especially stop order?

  • Anonymous

    Does Interactive Broker support Fractional Stock purchase of VOO ETF?

  • Anonymous

    May I know IBKR will charge how many money on fractional share?

  • š_n

    I’m still not sure how this works on technical level. What it means in fact on technical level when I own some fraction of a share? Consider a scenario of buying multiple times fractions of share X, let’s say I’ll buy 0.7 of a share X, then 0.5 share of X and afterwards 0.9 of share X. Then technically I have 2.1 of share X. Does this mean that I own 2 shares as if I would buy them as 2 shares X (fully, not as fractions, and listed as the sole beneficial owner of those two shares) and on top of that I somehow “own” 0.1 of share X, e.g., listed among multiple beneficial owners of some other share? Or is it that I’m listed as beneficial owner on three different shares and for each I own 0.7, 0.5 and 0.9 fractions respectivelly? Thanks for info!

    • Interactive Brokers

      Thank you for reaching out. Fractional shares will automatically convert into whole shares if you have enough fractional pieces to add up to a whole number. Please reach back out with any additional questions. We are here to help! 

      • Michael

        Does that mean we will also receive the same rights as whole shares if we have enough fractional shares to be converted to whole shares?

        • Interactive Brokers

          Yes, this means you will receive the same rights. 

  • ŠS

    I still quite don’t understand how “strong” my ownership of shares is when trading fractions. Consider following scenario – I’ll buy 0.7, 0.5 and 0.9 of the same share in three different trades. Does it mean that after that I’m beneficiary owner of 2 complete shares + own 0.1 of another share, so my situation would be in effect the same as buying 2 shares in a single trade + 0.1 of the share in another trade? Or in given scenario I’m don’t own any share fully, just 0.7 of one share, 0.5 of another share and 0.9 of the third share? Thanks for explaining!

    • Interactive Brokers

      Thank you for reaching out. In this situation, this would be equivalent to 2 full shares plus an additional .1 of the share. We hope this clarifies things!

      • ŠS

        It’s all clear now. Thanks!

  • Anonymous

    Hi, I’ve checked your link for the commissions charged on the fractional shares, however it seems to only cover the USD and CAD securities. For European UCITS – ETFs, what are the comissions exactly? Thank you. Berk

  • Alex

    Hi, in total there 47236 stocks traded on ibkr as of today. How many of them are eligible for fractionary trading?

  • Anonymous

    Do u have a list of all fractionary traded shares. In the list of products, there is no specification whether they are eligible or not

  • Sebastian

    Hi, I had enabled the fractional share permissions in the Stock configurations, but I’m still unable to perform any fracquinal operation. Do you know if there’s a time I have to wait before it gets totally enabled ?

    • Interactive Brokers

      Hello, thank you for reaching out. Please view this FAQ for instructions to request trading permissions for fractional shares: https://www.interactivebrokers.com/faq?id=23299006

      Trading permission requests are forwarded for Compliance Officer review. Please allow time for the completion of the due diligence checks and trading permission review. IBKR is trying to review as many trading permission upgrades as possible given the current environment.

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The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

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