| Saxo now offers fractional trading in Singapore on more than 1,000 instruments. |
What is fractional trading?
Fractional trading allows you to trade instruments in smaller units than traditionally available. For example, you can buy a fraction of a share in companies with high share prices. This can benefit you if you would like to have a smaller exposure to the instrument than the price of one whole unit or share.
- What are fractional shares?
- Advantages and disadvantages of trading fractional shares
- Supported markets and instruments
- Checking fractional share availability
- How can I place a fractional trade?
- Are there additional fees applied on fractional orders and holdings?
- How do corporate actions work with fractional shares?
- Can I transfer fractional shares?
What are fractional shares?
Fractional shares are portions of a whole share of a company's stock. Instead of buying a full share, you can purchase a fraction of a share. This allows you to:
- Invest in high-priced stocks with a smaller amount of money
- Invest precise amounts
- Fully utilise all your available funds
This makes it easier to diversify your investment portfolio and tailor your investments to fit your budget.
ExampleImagine you wish to invest a total of USD 4,500 in shares of three different companies. You would like to get the same exposure of USD 1,500 to the three companies. Company 1 The shares of this company trade at USD 500 per share, so you buy three shares. Your exposure to this company's shares is now USD 1,500 (3 shares x USD 500 = USD 1,500). Company 2 The shares of this company trade at USD 3,000. Therefore, you buy 0.5 shares to gain an exposure of USD 1,500 (0.5 shares x USD 3,000 = USD 1,500). Company 3 The shares of this company trade at USD 1,000 per share. Therefore, you buy 1.5 shares to gain an exposure of USD 1,500 (1.5 shares x USD 1,000 = USD 1,500).
This example shows how you can use fractional trading to gain the desired exposure to an instrument that would not have been possible otherwise with whole units. Without fractional trading, you would have to accept either a higher or lower exposure to the instrument than desired. |
Advantages and disadvantages of trading fractional shares
Advantages
- Accessibility: Fractional shares allow you to invest in high-priced stocks without needing a large amount of capital.
- Diversification: You can diversify your portfolio more easily by spreading your investments across a variety of stocks, even if you have a small budget. This can help in managing risk.
- Flexibility: Fractional shares enable you to invest precise amounts of money, allowing for more strategic portfolio management and the ability to invest in specific amounts rather than whole shares.
Disadvantages
- Availability: Not all instruments support fractional trading.
- Complexity in management: Managing a portfolio with many fractional shares can be more complex.
Supported markets and instruments
With Saxo you can engage in fractional trading in multiple asset classes. The total number of instruments available exceeds 1,000 and covers ETFs, stocks, ETCs, preferred shares, funds, and more.
Checking fractional trading availability
To check if an instrument supports fractional trading, navigate to the trading conditions and under Instrument check for Min. trade size. Here you can view the minimum trade size, which represents the lowest possible trade in the instrument.
Platform availability
Fractional trading is enabled on all Saxo platforms.
How can I place a fractional trade?
You can follow the steps below to place a fractional trade:
- Find an instrument and check fractional trading availability
- Open a trade ticket for the desired instrument
- Enter the amount you want to invest, and the fractional number of shares will be calculated. You can do this by clicking the blue calculator icon and typing the amount determined in account currency
- Confirm your trade by clicking Place order
In the example above, the calculator was used to determine the number of shares equivalent to exactly USD 5,000.
Are there additional fees applied on fractional orders and holdings?
No additional trading costs are applied to fractional orders. Custody fees might apply to your holdings.
How do corporate actions work with fractional shares?
You are entitled to dividends in proportion to your ownership, and other corporate actions, such as stock splits. However, there are no voting rights for a fractional share.
You will pay the same dividend withholding tax rate on fractional shares as you pay on whole unit shares.
Can I transfer fractional shares?
Our system currently supports the transfer of shares in whole numbers only, meaning fractional shares such as 100.5 cannot be transferred. You can sell the fractional portion, like 0.5 shares, and transfer the remaining whole shares, such as 100, to your desired sub account or external institution. Alternatively, you may purchase additional shares to round up to the nearest whole number for a complete transfer.