How do fractional shares work?

Modified on Thu, 12 Jan 2023 at 05:33 PM

One of the unique things about the US stock markets is that investors can own fractions of stocks unlike markets of countries like India. For example, you could own 0.05 of Apple stock. Our brokerage partner DriveWealth allows you to own as low as 0.0001 shares of any stock. This is an advantage for 2 main reasons: 

- You don't have to think in terms of "how many shares should I buy?". You can simply decide to invest a certain amount of money and the number of units to be allocated to you gets automatically calculated and would get credited to your account. For instance, if a stock is valued at $27* and you decide to invest $100 in it, you will get 3.70* shares.

- Many popular US stocks are more expensive than typical Indian stocks. While a single Apple stock is valued at over $200*, Google costs over $1,000* and Amazon costs more than $2,000*. Pepsi, Nike, Coke - all between $100* and $200*. Hence, with fractional stocks, you could effectively build a pretty diversified portfolio with small amounts of money.

*values mentioned herein are solely for illustrative purposes.

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