Fractional Shares ⁉️
What’s fractional shares?
Simply put, it’s the financial concept that allows investors to own a portion or fraction of a single share of a stock. Or in the similar analogy, you get to buy a slice 🍕 instead of entire pizza to suit your appetite & budget ![]()
While compounded interest is known as the eighth wonder of the world, fractional shares could be ninth for investors with limited capital due to benefits which can be better illustrated based on scenario below:
I would like to start investment in stock market with a startup capital of $300 and fixed amount of $100/month subsequently. Below are the stocks that I’m interested in:
• Microsoft - $313.64/share
• Mastercard Inc - $399.44/share
• Broadcom Inc - $832/share
💢 Accessibility
Without fractional shares: Can’t afford any since min capital needed for 1 share is > $300
With fractional shares: Can afford to buy all 3 stocks
💢 Diversification
Without fractional shares: Low or No. Even if were to increase startup capital to $320, only afford to invest in 1 instead of all 3 stocks hence allowing no diversification
With fractional shares: Can afford to buy all 3 stocks hence allowing diversification and minimizing risk.
💢 Dollar cost averaging
Without fractional shares: Difficult to apply. With $100/month, will need to accumulate capital over longer period of time prior to next top up.
With fractional shares: Easily apply since invested capital is significantly lower.
💢 Education and learning
Without fractional shares: Could result in a huge blow to the capital hence deterrent to newbie to venture into the world of investment.
With fractional shares: Good opportunity for newbie to learn and gain real-world experience without risking significant capital.
💢 Cost effectiveness
Without fractional shares: Low, likely to have uninvested cash balances which affects potential returns maximization.
With fractional shares: High since easier to invest exact amount of money desired hence minimizes cash balances.
💢Flexibility
Without fractional shares: Low, can only buy/sell the who share hence less flexibility in investment portfolio adjustment.
With fractional shares: High, allowing investment portfolio adjustment to cater for market outlook change/volatility.
Let’s summarise in a table, for a quick comparison:
So how you get the fractional shares purchased from Moo moo? Refer to below steps: ![]()
Markets > US > Fractional shares
Select the desired stock you would like to purchase, I choose Broadcom for my preference:
Look at the symbol, light green symbol for Fractional shares then press Trade
At Order Type, choose Market.
Select Amount. (or Quantity, vice versa)
Enter any amount you afforded to. The quantity will be auto-calculated based on the stock price.
Press Trade and waiting for stock purchase/ notifications.
Then, you are done!! ![]()
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Let’s try it! ![]()
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Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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