Definition
Fractional shares allow investors to buy portions of expensive stocks with smaller amounts of money. Instead of needing $3,000+ for one Amazon share, you can invest $100 and own a fraction. Brokers enable this by pooling orders or holding shares on behalf of fractional owners. It democratizes access to high-priced stocks.
Example
You invest $100 in Amazon trading at $3,000/share. You own 0.0333 fractional shares.
FAQ
What is Fractional Shares?
Ownership of less than one full share of stock.
Why is Fractional Shares important?
Fractional Shares helps investors evaluate trading mechanics and make more informed decisions.