Recently, many people have asked me how to sell fractional shares, and I realized that many small investors still have a lot of questions about fractional share trading. So today, I’ll share the knowledge I’ve organized about buying and selling fractional shares, including how to sell them more smoothly, trading hours, transaction fees, and other practical tips.

First, let me briefly explain what fractional shares are. The minimum trading unit for whole shares is one lot, which is 1,000 shares, but sometimes you may hold less than 1,000 shares of a stock, and that’s called a fractional share, with a minimum unit of 1 share. Fractional shares usually occur because your buy or sell orders were not fully executed, or during stock dividends or rights issues.

I’ve noticed that Taiwan’s rules for fractional share trading have improved quite a bit in recent years. Previously, fractional shares could only be traded after hours. Starting October 26, 2020, investors can buy and sell fractional shares during regular trading hours, which is much more convenient for small investors. The intraday trading hours are from 9:00 AM to 1:30 PM, and transactions are only through electronic orders (using the broker’s app). The matching occurs at 9:10 AM for the first time, then every minute via call auction. After-hours trading is from 1:40 PM to 2:30 PM, where you can place electronic or manual phone orders, with a single call auction at 2:30 PM. Note that unfilled orders during the day do not automatically carry over to after-hours; you need to place a new order.

Regarding how to sell fractional shares, I think there are two very practical tips. The first is “convert fractional to whole,” meaning if you want to sell a stock that isn’t very actively traded and fractional trading is difficult, you can first buy enough shares to make a whole lot, then sell the whole lot in one transaction. This greatly improves liquidity. The second tip is for after-hours trading: if you need to sell quickly, you can try placing a sell order at the limit down price, because after-hours only has one matching session, and following the maximum transaction principle, placing a limit order at the limit down price gives the highest chance of a successful sale.

As for transaction fees, buying and selling fractional shares are calculated the same way as whole shares: 0.1425% of the transaction amount. However, different brokers set minimum fees (usually starting at 1 NT dollar) and offer discounts for electronic orders. For example, buying 200 shares of TSMC at the latest closing price of 1,065 NT dollars, the fee would be 200 x 1,065 x 0.1425% = 303.53 NT dollars. With a 50% discount, it’s 151.77 NT dollars. The discount rates vary greatly among brokers: Fubon Securities offers 1.8折 (18%), E.SUN Financial Holdings 2折 (20%), KGI Securities 6折 (60%), Shin Kong 1折 (10%), and Uni-President Securities 1.68折 (16.8%).

However, I have to be honest: fractional share trading also has obvious disadvantages. Liquidity is much lower than for whole shares, and execution times can be longer. Although the fee rate is the same, because of minimum fee restrictions, if you buy only a small amount, the fee can represent a large percentage of your cost. For example, if you buy only 1,000 NT dollars worth of fractional shares, the fee might be around 20 NT dollars, which is a significant cost. Additionally, fractional shares can only be sold; you cannot place buy orders for them, so when selling, you must sell all at once.

Fractional share trading is indeed suitable for small investors doing regular, fixed investments, with a low capital threshold—around 1,000 NT dollars to start. But remember, the costs of buying and selling fractional shares are often higher than for whole shares, and liquidity is lower, so don’t expect to sell quickly. Most importantly, be patient, plan rationally, and don’t let short-term fluctuations influence you.