Fractional shares: How to start fractional investing
With Stake, you are able to buy and sell fractional shares starting from just US$10. Instead of having to pay the full price of a security, you can invest a whole dollar amount and have fractional ownership of a portion of a share.
With Stake, you can buy and sell fractional shares starting from just US$10 per order. Instead of paying the full price of a security, you can invest a dollar amount and gain fractional ownership of a portion of a share. Fractional shares are available on Stake Wall St only and are not available on Stake AUS. Trades are executed, cleared and custodied by our U.S. broker partner, DriveWealth.
What are fractional shares?
Fractional shares enable investors to purchase and trade a portion of a company’s stock or ETF, without needing to buy a full share.
This makes it easier to:
Invest in high-priced stocks
Build a more diversified portfolio
Allocate smaller amounts across multiple investments
In the past, fractional shares were typically created through stock splits, dividend reinvestment plans or corporate actions. Today, platforms like Stake allow you to buy fractional shares directly. Fractional shares may have different rights and treatment compared to whole shares.
How do fractional shares work?
When you submit an order for less than a whole share, Stake’s broker partner, DriveWealth, may purchase the full share and allocate a fraction to your account. The remaining portion may be held and allocated across other customers.
Fractional and whole-share components of an order may be executed differently, and prices are based on prevailing market quotes at the time of execution.
For example:
If you buy a fraction of a high-priced stock, the underlying full share may still be purchased at the broker level
Your ownership is recorded as a fractional position held in your account
Your shares are held in your name under a custodial model.
Ownership and Returns
When you own a fractional share:
You participate in price movements proportionally (gains and losses), but fractional shares may have different rights compared to whole shares, including in voting, transfers and corporate actions.
You take on the same market risk as full-share investors
However, some features may differ from whole shares, including how voting and corporate actions are handled.
🎓 Learn more: What types of orders are available on Stake?
Fractional shares example
In this example, a company is trading at US$200 per share.
If you invest US$100:
You would receive 0.5 shares
If the share price increases by 10%, your investment would also increase by 10%
Fractional shares track performance in the same proportion as full shares.
What are the benefits of fractional shares?
Fractional investing can make it easier to get started and stay invested. These benefits should be considered alongside the limitations and risks of fractional investing.
Accessibility
Fractional shares allow you to invest in companies with higher share prices using smaller amounts.
For example:
Stocks trading at hundreds of dollars per share can still be accessed with as little as US$10
This lowers the barrier to entry for new investors
Diversification
Investing smaller amounts across multiple stocks can help build a more diversified portfolio.
A portfolio can be spread across multiple companies
You don’t need to exclude stocks due to price alone
Dividends
Fractional shares are generally eligible for dividends.
Dividends are paid on a pro-rata basis
For example, holding 10.4 shares paying a $10 dividend would result in $104
Note: Dividend payments may be subject to minimum thresholds.
Dollar-cost averaging
Fractional shares make it easier to invest consistent amounts over time, helping smooth out market volatility.
Voting Rights
Fractional shares may have different voting rights compared to whole shares.
In general, holders of fractional shares do not have voting rights for the fraction of a share owned.
Where voting is facilitated, fractional positions may be aggregated, rounded or not counted depending on issuer and third-party processes.
How to buy fractional shares?
Want to start buying $AMZN or $AAPL but don't have the capital for the whole share? You can buy fractional shares by entering a dollar amount instead of the number of shares.
1. Open a stock investing account
To invest in fractional shares and ETFs on Wall St, you'll need to sign up to an investing platform with access to the U.S. stock exchanges like Nasdaq and NYSE. Lucky for you Stake has access to both.
2. Fund your account
Complete an application with your personal and financial details. Deposit funds via bank transfer, card, or other supported payment methods.
3. Search for the U.S.-listed asset
Find the asset by searching for the name or ticker symbol. Do your own research to ensure it is the right investment product for your own circumstances.
4. Choose a market or stop order type and buy the asset
Buy a fractional amount on any trading day with a market or stop order. Look into dollar cost averaging to spread out your risk, which smooths out buying at consistent intervals.
Enter the dollar amount you want to invest.
Minimum investment is US$10 per order
Fractional trades may support a limited set of order types depending on the product and trading session (for example, market or stop orders).
5. Monitor your investment
Track performance over time and adjust your portfolio as needed.
When placing a fractional trade:
You may receive multiple confirmations (whole + fractional components)
Final execution price may differ from the displayed price
When buying fractional shares, you set the dollar ($) amount you want to buy and can only use market and stop orders.
When you execute a trade for a fractional amount of more than 1 share (i.e 5.6513 shares), you will receive two confirmations: 1 for the whole share component, & 1 for the fractional part.
Can you sell fractional shares?
Yes, you can sell any fractional shares you own.
When selling:
You enter the share amount (e.g. 4.3142 shares)
You can sell all or part of your position
Execution depends on market conditions, and prices may vary at the time of trade.
Things to consider when purchasing fractional shares
Order types
Only market and stop orders are available for fractional shares
Limit orders are not supported
Voting rights
Not all fractional shares will carry voting rights
Outcomes may vary depending on the company
Voting outcomes may differ because:
Fractional holdings are aggregated with other investors
Third-party tabulators may round down fractional positions
Some issuers may not recognise fractional holdings in vote counts
Transferring fractional shares
Fractional shares are generally not transferable between brokers.
If you transfer or close your account:
Fractional holdings will typically need to be sold
This may result in price differences, fees, or timing impacts
Execution and pricing
Prices may differ from what you see at order placement
Market volatility can impact execution
Fractional trades are executed with reference to the price of the full share at the time of the order.
Fractional trades may not be eligible for price improvement, and execution is performed on a best-efforts basis.
The execution price you receive may be higher or lower than the price displayed when placing your order, particularly during periods of market volatility.
Rounding
Fractional positions are recorded to multiple decimal places
Settlement values may be rounded to the nearest cent
Rounding may affect dividends, corporate actions and final trade values
Availability/Eligibility
Not all securities are eligible for fractional trading
Eligibility may change over time
Securities may become sell-only if eligibility changes
Do fractional shares pay dividends?
Yes, fractional shares pay dividends.
Payments are made proportionally based on your holding
Dividends must meet a minimum payment threshold (e.g. US$0.01) to be credited.
Smaller amounts may not be paid.
For example, 3.25 shares paying a $10 dividend would result in $32.50
Dividends may not be paid if they fall below minimum thresholds.
Can you buy fractional shares on exchange-traded funds (ETFs)?
Yes, owning as little as US$10 of any U.S. ETF is made possible through fractional share ownership. This means you can invest in ETFs with as little as US$10, making it easier to access diversified exposure.
Learn more about exchange-traded funds before you start investing.
Fractional shares FAQs
Yes, Stake does offer fractional share investing for listed companies on the U.S. stock market. This means you can buy and sell a partial share in different companies instead of needing the full amount of capital to purchase the whole share. So if you want to start your investing journey with half of a share, that is possible.
When you purchase fractional shares, you are able to buy stocks and ETFs for as little as US$10. This is a great way for new investors to diversify their portfolio by buying shares in companies that would usually be out of reach due to the large price tag on the whole share amount.
If you own fractional shares in a company that undergoes a stock split, they won't be affected any differently from if they were full shares.
For example, if you own 4.5 shares of a company that rolls out a 2-1 stock split, you will then now own a total of 9 shares.
Yes, you can buy fractional shares in Australia.
Sign up to Stake and start investing in partial shares of the world's biggest companies listed on Wall St from just US$10.
Yes, you can make money trading fractional shares but like any investment, you can also lose money.
If the price of a stock goes up that you own a fraction of, you could sell it for a profit. The same can be said if the price goes down and you were to sell and would suffer a loss.
Important information
This content is for educational purposes only and does not constitute financial product advice. Fractional trading involves additional risks and limitations compared to whole-share trading. Fractional shares are available on Stake Wall St only and are subject to eligibility and service provider limitations.
Before investing, you should review:
This does not constitute financial product advice. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking appropriate financial or taxation advice before investing.
Samy is a markets analyst at Stake, with seven years of experience in the world of investing, working across roles in private banking, venture capital and financial media. She has a Master’s degree in Finance and Data Analytics from The University of Sydney Business School.
