[Fractional Shares Trading Guide] How to sell fractional shares more easily? What are the trading hours? What are the fees? Essential knowledge for small investors.

Fractional share trading has become a new favorite investment option for small investors in recent years. After personally trying it out, I found that it is indeed a lower-threshold investment channel. Today, I will share my insights on fractional share trading, including trading hours, fees, and some practical tips.

What is a fractional share?

The trading unit for whole shares is 1,000 shares of (, while fractional shares refer to holding less than 1,000 shares, with a minimum unit of 1 share.

The reasons for the occurrence of odd lots are:

• The order was not fully executed.
• The stock price volatility is too fast, resulting in some transactions not being completed.
• Fractional shares generated during the stock allocation process

In simple terms, odd lot refers to the trading of “fractional shares,” with each order not exceeding 999 shares.

Teaching on Trading Odd Shares 1: Trading Hours and Trading Regulations

Previously, odd lots could only be traded after hours, but starting from October 26, 2020, investors can buy and sell odd lots during regular trading hours!

Odd Lot Trading Schedule:

I must remind everyone that unexecuted or partially executed orders during the trading session will not be automatically retained for after-hours trading; you need to place your order again. Unexecuted orders after hours will also be automatically canceled and will not be retained for the next day. This point caused me quite a bit of loss when I first started trading!

Rules for Odd Lot Trading:

• Can receive dividends: Shareholders holding fractional shares are also entitled to dividend rights.
• Dividends can be distributed: The portion that is less than one share is usually converted into a cash distribution.
• The minimum trading unit is 1 share: The trading quantity must be 1 share or its whole multiples.
• Odd lots can be freely bought and sold: The Taiwan Stock Exchange recognizes odd lot trading and stipulates that it can be traded during market hours.

Lesson 2: How to Buy Fractional Shares? Account Opening and Fees Introduction

The channels for trading fractional shares and whole shares are the same; just switch to “Fractional Share Trading” mode on the order page of the brokerage app. The unit of quantity for buying will change from “lots” to a number of shares ranging from 0 to 999.

The calculation method for odd lot transaction fees is the same as for full lots, both being 0.1425% of the buy or sell amount. However, different brokers have different settings for the minimum transaction fees and discount offers for odd lots.

Taking the purchase of 200 shares of TSMC )2330.TW( as an example, the calculation of the handling fee: 200 shares × 1065 CNY ) assuming price ( × 0.1425% = 303.53 CNY

If the brokerage offers a 50% discount, the actual handling fee: 303.53 yuan × 50% = 151.77 yuan

Comparison of Commission Fees for Major Brokerage Zero-Shares Trading:

Fractional Shares Trading Tutorial 3: How to Sell Fractional Shares More Effectively?

I found that when trading fractional shares, the trading volume for less popular stocks is lower, and they may not necessarily be executed smoothly. If an order placed during the day is not executed, it will need to be placed again after hours or the next day.

Two practical tips to share:

1. Consolidate the fragments

If you hold 700 shares of a certain obscure stock and are unable to sell them, you might consider buying 300 shares first to make a total of 1000 shares )1 lot (, and then sell through more active whole-share trading. I have used this strategy a few times, and it works quite well!

2. Buy at the limit up price and sell at the limit down price

In after-hours trading, since there is only one matching opportunity at 14:30, if you really want to buy a certain stock, you can try to buy at the limit up price to increase the chances of execution. Similarly, when in a hurry to sell, you can place an order at the limit down price to increase the possibility of execution.

Is it good to buy fractional shares? Analysis of pros and cons

Advantages:

• Low capital threshold: Suitable for small investors, no need to invest a large amount of capital.
• Trial Investment: Low-risk experience in the stock market, suitable for beginners.
• Diversify Investment Risk: Funds can be spread across multiple stocks.

Disadvantages:

• Poor liquidity: Longer matching times, sometimes difficult to execute trades.
• Higher transaction fees: The minimum fee limit may lead to excessive costs for small transactions.
• Trading process is restricted: Odd lot trading has more restrictions compared to round lot trading.

Other Investment Options for the Low-Income Group

If you are concerned about the high fees and liquidity issues of trading fractional shares, the contract for difference ) CFD ( is also an option.

Taking Google stock as an example, if you directly purchase 5 shares, the total expenditure is: 400 USD × 5 = 2000 USD

But if you purchase 5 Google contracts for difference with a margin of 5% for ), you only need to spend: 2000 USD × 5% = 100 USD

But I must remind you that fractional shares are suitable for long-term holding, while contracts for difference are more suitable for short-term trading, and holding positions overnight will incur overnight interest costs.

Summary

Fractional trading provides small investors with a low-threshold opportunity to participate in the stock market. With technological advancements, fractional trading has become increasingly convenient, but investors still need to understand their own risk tolerance, learn basic analytical methods, and maintain a rational investment mindset.

I personally believe that fractional share trading is very suitable for beginners who want to enter the stock market with a small amount of capital, but don't overlook the impact of fees on small transactions. If you plan to hold quality stocks for the long term, fractional shares are indeed a good starting point!