Fractional shares: How to start fractional investing
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.
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? Learn how to buy fractional shares on the Stake stock investing platform below.
1. Open an account
Sign up to an investing platform with access to U.S. markets like Nasdaq and NYSE.
2. Fund your account
Deposit funds via bank transfer, card, or other supported payment methods.
3. Search for the asset
Find the stock or ETF using its name or ticker.
4. Place your order
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
Can you sell fractional shares?
Yes, you can sell fractional shares at any time.
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 are eligible for dividends.
Payments are made proportionally based on your holdings
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 of exchange-traded funds (ETFs)?
Yes, fractional investing is available for U.S.-listed ETFs.
This means you can invest in ETFs with as little as US$10, making it easier to access diversified exposure.
What is the minimum investment for fractional shares?
The minimum investment is US$10 (excluding brokerage fees) per order on Stake Wall St.
Are fractional shares available on Stake AUS?
No. Fractional shares are only available on Stake Wall St.
Do I own the underlying security?
Your Stake Wall St account is held in your name with DriveWealth, our U.S. broker partner.
When you invest in fractional shares, you hold a fractional interest in the underlying security through your account, rather than a full share.
Fractional shares are recorded and maintained in accordance with DriveWealth’s custody and brokerage arrangements.
Can I transfer fractional shares to another broker?
No. Fractional shares are generally not transferable and may need to be sold.
Do fractional shares receive dividends?
Yes, on a proportional basis, subject to minimum payment thresholds.
Can I vote on fractional shares?
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 the issuer and third-party processes.
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.
Fractional shares FAQs
This does not constitute financial product advice nor a recommendation to invest in the securities listed. 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.
Market Analyst
Megan is a markets analyst at Stake, with 7 years of experience in the world of investing and a Master’s degree in Business and Economics from The University of Sydney Business School. Megan has extensive knowledge of the UK markets, working as an analyst at ARCH Emerging Markets - a UK investment advisory platform focused on private equity. Previously she also worked as an analyst at Australian robo advisor Stockspot, where she researched ASX listed equities and helped construct the company's portfolios.
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