Robinhood’s Fractional Shares
Many investors looking for a good broker for fractional share trading consider Robinhood a good choice. There are no commissions, and the broker’s fractional share service includes the most popular listed stocks and ETFs.
Here’s how to trade fractional shares on Robinhood.
Key Takeaways
• Robinhood offers fractional share trading, allowing investors to buy stocks and ETFs in dollar amounts rather than whole shares.
• The minimum trade size for fractional shares is $1 or 1/1000000 of a share.
• Fractional share trading is available during extended hours trading, but not in the overnight (24-hour market) trading session.
Fractional Shares at Robinhood
One of the things that has made Robinhood as popular as it is today is its focus on accessibility. The broker is set up to allow investors of all kinds to build portfolios that meet their specific needs, even when that means getting started with as little as $1.
By using fractional shares, investors can add nearly any stocks or ETF to their portfolio, regardless of the share price. This allows investors access to some of the market's most resilient companies. It also makes it easy to build a well-balanced and diversified portfolio with precise allocations given to the chosen securities.
Robinhood’s Fractional Shares Fees
Another thing that makes Robinhood popular is its low fees. Robinhood is a no-commission broker, so
you
don’t have to pay Robinhood to trade fractional shares.
There are a few regulatory fees, but they are sub-penny fees that most retail traders never even notice.
Besides regulatory fees, margin fees could also hit your account if you are trading fractional shares on
margin. However, the margin rate of 5.75% would apply to the entire
order, whether fractional shares were used or not.
You can read more about Robinhood’s fees
here.
Open Robinhood Account
Up to $200 free stock + 1% IRA match + transfer fee refund at Robinhood.
Open Robinhood Account
Using Robinhood’s Fractional Share Feature
Robinhood makes it quite simple to open new positions with fractional shares. In Robinhood terms, you can either trade in shares or trade in dollars. When placing orders for fractional shares, Robinhood executes orders at the best possible market price - limit orders are reserved for whole-share orders.
To place an order, therefore, you can either define a dollar amount or a share quantity expressed in
decimals instead of fractions.
For example, you can buy a fractional share of Tesla for any dollar amount you want (above $1) if you
select ‘Buy in Dollars.’
Or you can place the same order by entering your preferred share quantity.
Can You Buy Fractional Shares of Berkshire Hathaway (BRK.A)
Robinhood has a minimum fractional share limit of 0.000001, but there are no $1 million stocks that you
could use the lowest allowable fraction on. The most expensive stock available is BRK.A (Berkshire Hathaway), and it is currently trading at $629,422 per share. If you were to buy 0.000001 worth of BRK.A stock, the order would get rejected because it would not meet the $1 minimum.
Is Robinhood Good for Fractional Shares Trading?
Yes, Robinhood is a good broker for fractional shares trading. Not only is the broker’s platform easy to use, but it is also cost-effective and provides many useful features. Although Robinhood is built with accessibility in mind, features like fractional share trading open the door to many popular investment strategies like dollar cost averaging, dividend reinvestment, portfolio diversification, and more.
Free Robinhood Account
Up to $200 free stock + 1% IRA match + transfer fee refund at Robinhood.
Open Robinhood Account
Updated on 1/1/2025.
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