Fractional CFD's Trading
What is fractional CFD trading?
Imagine you wanted to trade a US CFD Share, such as Apple. As company shares are issued as whole units, historically, this meant that you had to buy a whole unit of a Apple CFD to start trading. The Minimum will be 1 share and these exercises will be expensive, this makes trading difficult for new traders to enter quality CFD shares.
With fractional CFD trading, you no longer have to trade in full units of CFD shares. You can now enjoy the flexibility to trade the most popular stocks in sizes that range from as low as 0.01, meaning you can now go long or short on a fraction of a Apple shares.
So, if a Share price trades at $100, then you can buy it in multiples of $100. However, with fractional CFD’s trading you can buy whatever cash amount suits you. If you want $5 of a stock that costs $100 you can do that. If you want to buy $50, you can do that too, regardless of the stock prices.
So fractional trading is another way to potentially bring down cost and improve market access, especially for smaller investors.
Who is eligible to trade fractional shares?
All individual accounts are eligible for fractional CFD’s share permissions.
What products can be traded on fractions?
Brokers can offer fractional share trading on eligible U.S. stocks listed on the Margin List.
Please note, this Margin list is subject to change without notice.
Can I short fractional shares?
Most brokers do support short trades in fractional shares of eligible stocks as long as you have margin and approved trading permissions to trade fractional shares of stocks listed in the U.S.
What are the fees associated with fractional shares?
There is no additional fee to use fractional share trading. Standard commission rates apply.
What order types can I choose for fractional trading?
Most Brokers will only accept certain types of orders for fractional shares (e.g., market orders, limit orders, stop orders etc.).
Will I have voting rights for fractional shares in my account?
You will not have voting rights for any of the fractional shares held in your account, you will not be able to make voluntary elections on any corporate action (including, without limitation, any tender offers, or rights offerings) with respect to such fractional shares.