Fractional shares have the potential to democratize stock markets. People who never had access to expensive or highly-priced shares can start investing in the top companies.
If you want to invest through fractional shares, here is what you need to do.
● Choose a brokerage with fractional shares feature. Since fractional shares have grown in popularity in recent years, your current broker may not offer fractional share trading. Choose a brokerage that charges nominal transaction fees and lower commissions, along with timely settlements.
● Identify if you need to place a special request or activation for fractional shares. Find out if you need to put a special request for trading fractional shares.
● Develop a stock watchlist with shares of companies that you would like to trade. Make sure you diversify across industries, sectors and locations to mitigate risks.
● Start trading fractional shares. Ideally, you should be able to input the amount you want to invest in a particular share. Your broker will calculate the equivalent fractional share and process the trade. When the market meets your strategy conditions, calculate your risk amount, trade size and execute your trades.