Recently, many retail investors around me have been asking about fractional shares, so I’ll share the information I’ve put together in the hope it helps people who want to sell fractional shares or buy them.

When it comes to fractional shares, they’re basically scattered lots of stock that are less than 1,000 shares. In the past, trading fractional shares was especially inconvenient—you could only trade after-hours—but since October 2020, things have improved a lot. Now you can trade during market hours, from 9:00 AM to 1:30 PM. There is also an after-hours trading session from 13:40 to 14:30. During market hours, you must place orders electronically; during after-hours, you can place orders by phone or online. This is much more convenient for people who work regular jobs.

As for how to sell fractional shares more easily, this is my own experience. If the shares you hold are not in high demand, they might not be matched and sold on the same day. In that case, there’s a tip called “convert fractional into whole,” which means you first buy enough shares to make up a full board lot, and then sell that whole lot through whole-share trading, which has better liquidity. Also, during after-hours trading, if you really need to sell fractional shares urgently, you can try placing an order at the limit-down price, because after-hours trading matches only once. By following the principle of maximum transaction, the chances of successfully selling are higher.

Regarding fees, the fee rate for buying and selling fractional shares is the same as for whole shares—it is 0.1425%—but brokers set a minimum transaction fee. Among the brokers I’ve looked at—Fubon, E.SUN, KGI, Shin Kong, and Uni-President Securities—the minimum transaction fee is 1 NT dollar. However, the discount for electronic orders varies a lot: some are 1.8% of the standard rate, while others are only 1%. If you calculate it, buying 200 shares of TSMC would cost about over 300 NT dollars in fees; with a 5-tenths (50%) discount, it would only cost about over 150 NT dollars. So when choosing a broker, be sure to compare how strong the discounts are.

The advantage of fractional shares is the low capital requirement—you don’t need to invest several tens of thousands of dollars at once, which makes them suitable for regular, recurring investments. But you also need to recognize the drawbacks: liquidity is indeed worse than whole shares, matching can take longer, and with the minimum-fee limitation, the fee portion can be relatively high if you buy small amounts. If you truly care a lot about costs, you can also consider a derivative like a contract for difference (CFD), which requires much less margin—you only need to pay the difference (spread). However, this is suitable for short-term trading; unlike fractional shares, you can hold them long-term.

In summary, if you want to sell fractional shares or invest in fractional shares, the current environment is much more friendly than before. The key is to understand your own risk tolerance, choose the right trading method, and don’t blindly follow trends. Fractional share trading is becoming more and more common, and it’s definitely a good option for retail investors—it all depends on how you use it.