What Are Fractional Shares?
Fractional shares are less than one full share of equity in a company. Many stocks are priced very high for small investors which can make stock ownership in that company out of reach. Fractional shares give investors the ability to trade any fraction or dollar value in a listed company. For example, you may buy fractional shares worth $50 in Amazon or buy 0.05 shares of Netflix, which are otherwise priced much higher. Our brokerage partner allows you to invest in as little as 0.0001 shares of any stock.
This makes you think in terms of the amount of money you want to invest in a company, irrespective of what the share price is. So if a stock is priced at $40, and you want to invest $100 in it, you will receive 2.5 shares of the stock.
Note that you do not get voting rights on the fractional shares that you own. You will still have the voting right for each full share that you own in the same company. Dividends, however, are distributed proportionally to the fraction of the share that you own, rounded down to the nearest cent.