A fractional share is a small part of a company's stock which is less than one full share of the company and can be owned by an individual. An Individual cannot trade fractional shares openly on the stock exchange. It is a feature of major brokerage companies and it is only applicable to some major company's stocks on a particular stock exchange.
The investor also receives dividends, when issued by the particular company and receives it according to the fractional holding.
Which Canadian brokers allow buying and selling of fractional shares?
1. Wealthsimple Trade:
- Wealthsimple is an online capital management company and a Canadian discount broker which is known for its simplified yet modern user experience and convenience.It is one of the largest portfolio management companies based in Toronto and the company has over $15 billion of assets under management.
- An individual can invest in fractional shares through the Wealthsimple app by logging in to the mobile application or via desktop. On logging in to the account, add the required funds. In the "Fractional Trading" section of the app.
- The investor can select the company stock and after entering the amount the fractional quantity of the stock is displayed to the user. Hence the user can buy and sell the shares from the same section of the app. All the investments made on Wealthsimple platform are commission free.
2. Interactive Brokers:
- Interactive Brokers is a NASDAQ-listed stock brokerage platform that allows trading of stocks, stock futures and options, mutual funds and Exchange Traded Funds (ETFs), currencies, and bonds on about 150 international markets at a low cost.
- Interactive brokers manage total assets of value up to $12.2 Billion. Their platform has 2.2 million accounts active and they have earned various awards and allow fractional trading for its users.
- To enable the fractional trading facility, the investor can log in to the IBKR account and enable fractional trading via the account dashboard.
- The user can even invest an amount as small as $1 and they provide the same brokerage rates for investing in US and European fractional shares as in North American markets.
Buying & Selling Fractional Shares Canada:
Investing in fractional shares is a great way of diversifying one's portfolio and for dividends as well. An investor can invest in fractional shares from Canada through the brokers listed above and use the benefit of this feature.
Have you tried buying or selling fractional shares with Canadian brokerage companies? Do share your feedback.