Fractional Shares Explained - Everything You Need To Know About Sharing Shares

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Күн бұрын

Пікірлер: 161

@ThePlainBagel 3 жыл бұрын

Happy Friday! The first 100 people to use this link (or use coupon code PLAINBAGEL) will get a free week of Noa's premium subscription, plus 37% off the annual fee: www.newsoveraudio.com/bagel

@Mikasks Жыл бұрын

"Rather than buying a slice fo the pie, why not buy a slice of the slice" This killed me.

@KelechIwuaba 3 жыл бұрын

I remember when I got access to fractional shares I was so excited to be able to invest $25 every two weeks. But then I found out that the brokerage was taking a $5 fee for it so I BOUNCED harder than Lebron driving to the hoop. I just went with passive index funds but now so many platforms have made it much cheaper and easier to use

@nein9nein 2 жыл бұрын

I think you meant bounced faster than LeChina flopping

@Magic_beans_ 11 ай бұрын

Zero-commission brokerage has made that much more feasible. I now have my regular biweekly investment automated & spread across 20+ stocks,, so I’m basically my own ETF.

@TheSmokinPotato 8 ай бұрын

Lemmie buy into you id love some magic been etf @@Magic_beans_

@briangoldberg6501 7 ай бұрын

WEBULL in APRIL 2024, does not charge a fee. They make U buy fractional shares @ market rate. Not a bad deal.

@briangoldberg6501 7 ай бұрын

@@Magic_beans_ FACTS

@olgierdvoneverec4135 3 жыл бұрын

My brooker recently anounced they are going to start trading fractional shares, so this video is on perfect timing.

@SamsonBiggz 2 жыл бұрын

Love fractional shares. It feels like a lay-away program. I was able to buy an Amazon share using fractional shares. Now I could have just saved my money over the year and bought 1 share out right but I don't have that kind of will power. Now with fractional shares I bought $ 300 dollars worth every month until I had a full share. For some like me fractional shares is the way to go.

@xXRealXx 2 жыл бұрын

@Romeo ThePLUG some brokers don't charge for it, WHICH IS THE RIGHT THING TO DO (TO NOT CHARGE FOR BUYING FRACTIONAL SHARES). I use Trading 212, and they don't charge anything for buying fractional or whole shares.

@Liam_Daly Жыл бұрын

@Romeo ThePLUG webull and Robinhood both do fractional shares for free zero commisions

@ohigetjokes 3 жыл бұрын

Thanks for this. I have to admit I think I was a bit more enthusiastic about fractional shares than I should have been, and I feel a lot more informed now on how to deal with them.

@nicholasdean3467 3 жыл бұрын

Fractional shares makes my life so much easier. Auto reinvest dividends in the companies I bought. (Target, Microsoft, Seagate, etc)

@gamingguru2k6 3 жыл бұрын

Dump money into my portfolio every 2 weeks, and auto reinvest those dividends. Investing is easy now.

@grouchyinvestor2542 3 жыл бұрын

@@gamingguru2k6 "Investing is easy now" - famous last words before recession xD

@ekamsandhu134 3 жыл бұрын

@@grouchyinvestor2542 "Investing is easy now"- every new retail investor during a bull market

@isum9674 3 жыл бұрын

@@gamingguru2k6 Investing is easy proceeds to lose all my money

@gamingguru2k6 3 жыл бұрын

@@isum9674 Easy as in, low barrier to entry.

@stephen-finance 3 жыл бұрын

Democratized is right. It’s become easier than ever to grow wealth because of this. Although I think index funds and ETFs are better for beginners. And you can still buy into an index fund with as little as a dollar depending on the brokerage you use.

@SangoProductions213 3 жыл бұрын

If you're looking purely to have a safe bit of return, then sure, managed positions are often ... more or less correct. You still can't fully trust such management without knowing what they chose to invest in, but the point remains... If you are looking to gain experience with the stock market, picking right away is the best choice. Get burned by your bad practices when it really has little impact on your financial well being. Learn good habits, and sources of info.

@Karatop420 3 жыл бұрын

@@SangoProductions213 all the same, index funds usually beat out the experienced as well. Picking and trading is just for the enjoyment of picking and trading. The IKEA effect, if you will. Chance are very high that you'll make less than the index no matter how much experience you have. Although, you'll probably have much higher volatility than an index, so you'll CRUSH the index for short spans of time, lol.

@macrogenii 3 жыл бұрын

Basic b!tch bagel boi and his conservative simps

@jessechamberland 3 жыл бұрын

This was a great video. Explained in a very logical and engaging way and considered many aspects of the subject! Thanks Plain Bagel.

@Commando303X Жыл бұрын

Excellent segment -- thank you. I would like to add that, at least to my recollection, Warren Buffett has admitted that at least some of his motivation to have refrained from splitting Berkshire's class-A shares is simply emotional pride (the company even waited a relatively long while prior to offering its class-B option).

@Liam_Daly Жыл бұрын

Yeah, basically didn't want to be involved with "poor people"

@flyorraofficial 3 жыл бұрын

I love your educational knowledge. As well as video production and editing. And nice background. Honestly I think you're super genius. Most people are not.

@jasonluong3862 6 ай бұрын

This is the best video on fractional shares. It would be even better by showing an example.

@TooLateForIeago 3 жыл бұрын

I started a taxable account with a service geared to novice investors which only allowed its customers to invest dollar amounts instead of specifying numbers of shares to buy or sell. Imagine my chagrin when I moved to a real brokerage and discovered that only whole shares are transferred between brokers. Every one of my fractional shares was liquidated at market price and the cash sent over instead.

@iansweeney3831 3 жыл бұрын

Acorns?

@TooLateForIeago 3 жыл бұрын

@@iansweeney3831 Stash. Moved to Fidelity. Pretty happy with it.

@adc9270 3 жыл бұрын

Good info. Sounds like you never owned the shares at all and they did a calculation of what your money would have earned. At least some of your money amounted to a whole share in a company, right? What is the reason for not tranferring that?

@Lawrence330 3 жыл бұрын

@@adc9270 The reason is likely because these programs operate like index funds and you "own" some percentage of their fund, not any outright shares in the companies within the index. You couldn't transfer your Vanguard shares to iShares or Blackrock or whatever, even if they each track the S&P500 index.

@TopSquad 3 жыл бұрын

Love this format, informative, straight to the point and trying to make it as understandable as possible. Thank you a lot Plain 🤗

@grouchyinvestor2542 3 жыл бұрын

If the broker goes bankrupt, you'll get back your securities after some time (at least in Europe). Does it work the same with fractional shares?

@jackofthecoke 3 жыл бұрын

Yes. Still covered by SIPC in America.

@davide7414 3 жыл бұрын

Many brokers do not "support" fractional shares, and considering how they work I would think that those shares would be sold and the investors compensated in proportion. I do not know any specific European or national legislation, but I do not see how they could transfer half a share

@dontcare1656 2 жыл бұрын

It depends of what type of broker it is. If it's a broker that doesn't offer you b class stocks, but instead u can buy lets say 0.01 Tesla. Well those kind of brokers, if they go bankrupt u receive your money according EU regulations and this also counts for their normal stocks. It's the type of broker that let's you buy on their internal marked and they take the opposite position on the real market, so you do not really own the stock, therefor in case if they go bankrupt you do not have any obligations to the stock, cause again you didn't own it. But that doesn't mean that those real stock selling brokers don't take positions again their costumers tho 🤣

@fernandodobbin3806 3 жыл бұрын

In Brazil we have a similar concept. When you buy ordinary shares, you're actually buying a group of a hundred (if you buy two, you buy a group of two hundred and so on...). Fractional shares allow you to buy 1-99 shares by the same relative price. So, let's say you want to buy 150 shares of XYZ. You'll have to place two orders to buy. One for 1 XYZ and another one for 50 XYZF.

@fzigunov 3 жыл бұрын

Yes but if you convert currencies it's pretty much the same. Take PETR4 for example; it's currently traded at BRL25.34/share, meaning a 100 lot of shares is R$2534. Well, this is really USD482.67/lot as of Sept 11 2021. USD480 is on par with the individual share price of a blue chip US stock like FB, TSLA or APPL.

@vincentwong1127 3 жыл бұрын

lots of Asian country do that

@TheEmolano 6 ай бұрын

No it's completely different. You either buy 1 stock or 100. There's no way to buy 1/100 of a stock.

@eliteffsquadron9932 3 жыл бұрын

Hi can you make a video on the different levels of the shares of the same company like level A and level B

@WhiteWulfe 3 жыл бұрын

I love the sound of fractional shares. Means instead of having cash sitting in your account it can be put to use.

@coffeebean7340 Жыл бұрын

Great content. You should have more viewers!

@RabianskiT 10 ай бұрын

ROUNDING UP isn’t mentioned in the video. Commission-free brokers might offer you fractional shares with no fee, but they will keep rounding up your orders. For instance, 1 share might cost $1177, but when you buy 0.1 share you will pay $118 and when you buy 0.01 share you will pay $12. As mentioned in the oversimplified example above it isn’t that big of a deal when you buy tenths of a share. However, if you start buying hundredths or thousandths of a share it can be quite costly.

@Magic_beans_ 8 ай бұрын

True, but how much it matters depends on the broker’s policies, namely where they do that rounding. I use Fidelity, and they round to either 0.001 share or the $0.01. So the effect of rounding on, say, 0.001 share of Chipotle (priced at $2,903.44 as of this writing) is pretty small.

@acholouscognoscente 10 ай бұрын

Thank you for the video.

@therapturedmichelle 2 жыл бұрын

Thank you for a clear explanation.

@AlexanderPalumbo 3 жыл бұрын

I just started doing this with the new recently merged Ameritrade and Charles Schwab, fractional share investing is NECESSITY in order to have the little guy having a chance to win and get into the market.

@feynstein1004 3 жыл бұрын

@The Plain Bagel I couldn't find a good video on how the value of the S&P500 index is actually calculated. Do you think you could tackle this issue?

@johnkentucky1323 3 жыл бұрын

Its a company secret

@johnkentucky1323 3 жыл бұрын

Thats why some of the funds that copy it go up or down by different amounts because no one knows exactly how it’s calculated

@ekamsandhu134 3 жыл бұрын

Isn't it just a combination of the market capitalization of all holdings within the index. In this case, the top 500 companies in America? Am I missing something here :/. And then to calculate share price, some indices may have more outstanding shares than others, decreasing share prices. Hmm

@johnkentucky1323 3 жыл бұрын

@@ekamsandhu134 this took me a while to understand so I don’t know how well I can explain it. but basically there’s different ways of calculating how much of each company the fund should own, its called weighted. if they decide to own a percentage of the company then large market caps like amazon and apple would influence it more than 1b market caps. If they do a set amount of shares then companies with higher share prices would influence it more. So no one knows exactly how its determined and the funds try to get as close as possible.

@me-myself-i787 7 ай бұрын

It's all the companies in the index weighted by market capitalisation.

@hireahitCA 2 жыл бұрын

Sadly WealthSimple doesn’t offer Berkshire Hathaway on a fractional basis, but they do offer some others and it’s very new to them. It’s quasi-real-time, they don’t batch but the transaction clears at the price at the end of the day. Luckily the stocks they offer on a fractional basis don’t tend to be *that* volatile. I’m a fan of the concept because of the DCA approach although I actually do it manually by buying small stocks and shifting them to single larger stocks when I accumulate sufficient funds (whether due to money I’ve added, or stock price changes). Either way, I love to see new options.

@qjsharing2408 2 ай бұрын

Definitely understand better now

@MyTube.0101 Жыл бұрын

If one has two 0.5 shares of a company , will it be combined into one whole unit and will it be transferable to different broker?

@srajo1807 3 жыл бұрын

Great explanations. Now I know the terms for what my broker is doing.

@alperenaydin6139 3 жыл бұрын

I also wonder if it makes more sense to encourage lower share prices for companies. As to increase the liquidity. Maybe a tax based on share prices. Lower the share price, lower the taxes.

@Lawrence330 3 жыл бұрын

I suspect that having a very high trading price for Berkshire discourages frequent trading and increases the stability of the share price. I could be wrong, though. Mr. Buffet and I don't hang out.

@andre-nunes 3 жыл бұрын

Fractional shares make investing much easier

@WorldinRooView 3 жыл бұрын

On thing with the Broker being able to execute the fraction shares when they are able comes the fact that they will not allow you to do things like "Stop Loss" or "Limit Orders" or other such non-Market Value trades. Usually you are limited to Market Value executions only.

@AlexM-wo5qe 4 ай бұрын

Thank You for video. Question, what will happened with fraction of share if broker got bankrupt, will it be covered by SIPC?

@csanton3946 2 жыл бұрын

The more cheaper to buy a stock, the more people can trade and make it more liquid. Liquidity is supposed to reflect fair price at given available information but what we have seen in the stock market is liquidity often makes a stock overvalued as it invites a lot of speculators who buy stock to hold short term

@oscarmiranda9532 3 жыл бұрын

Hi Richard. Love your videos. Can you do a videos explaining Fractional Reserve Banking? Please.

@JackDuffley 3 жыл бұрын

Remember when stock splits were all the rage in 2020? Fractional shares are here to ruin the party lol

@StephenBuergler 3 жыл бұрын

When drip or split or merger happens who owns the rest of the split share? Is it similar to the two services you presented where the broker or other people who batch bought with you own the rest of the share?

@behrensf84 3 жыл бұрын

What about options trading with fractional shares? It’s hard to get 100 shares of amazon...

@kocokan 3 жыл бұрын

Do ETFs can be fractionalized too?

@Halbmond 2 жыл бұрын

I think there’s a third option: some brokers also enable fractional trades through derivatives, which is probably the worst solution.

@MasterLeong888 2 жыл бұрын

very good explanation thank you

@michaelsmith4904 3 жыл бұрын

How does batching work if the brokerage doesn’t accumulate enough orders for a full share? For an extreme example, say I want to buy $1 of BRK.A and there aren’t enough other fractional orders. I assume this could also happen in between whole shares, e.g. there are 0.999 shares on order and I want another 0.1, would it fill 0.01 right away and then sit there maybe for a long time?

@om5335 3 жыл бұрын

Can you male a video on the technicall tools you use for search and analisys? Thank you

@DarrylCobb 2 жыл бұрын

After buying so many fractional shares, does it eventually add up to a whole share?

@Magic_beans_ 8 ай бұрын

It should, yes. Imagine you buy Microsoft (share price around $400) at $50 a paycheck. After your eighth or ninth purchase those fractions will add up and pass the full-share mark. At least at my brokerage, from that point on the cobbled-together share is treated like any other full share. It gains voting rights and can be transferred.

@peopleofthestateofcalifornia 2 жыл бұрын

:A fractional share is a partial share of stock -- for example, one-half or one-third of a share. Fractional shares themselves aren't new. They occasionally turn up in investment portfolios, due to stock splits, mergers, or dividend reinvestment programs. You might own 19 shares of a stock that splits 3-for-2, for example. After the split, you'll have 28.5 shares. That one-half of a share functions like a smaller version of a whole share; it's worth 50% less and earns half the dividends, too. Here Some other reasons why you should not buy or trade fractional shares include With fractional shares, you lose a small portion of your return to your broker. There may be additional costs associated with fractional shares. With fractional shares, liquidity may be an issue. Stock availability may be limited with fractional shares. Fractional shares may come with trading limitations. Fractional shares may not give you voting rights

@blanc18 2 жыл бұрын

So you should avoid fraction buys unless its too a fund of stocks?

@michanch9029 3 жыл бұрын

Can you explain about tapering and the effect to the other country market as well? Thx

@kablahblahsquared 3 жыл бұрын

keep to jokes coming, its adds to the video!

@rahimo2637 Жыл бұрын

Hi every one i have qst ,is it this investement work and if there is any other investement work?

@CristianHernandez-312 3 жыл бұрын

And why Buffett got a small version of Berkshire Hathaway? Well, he wanted to have the ETF if his own company, instead of others profiting from it.

@jan-jans143 3 жыл бұрын

i find fractional shares very helpful for 3rd world countries where $ is so high, giving us chance to invest in US

@jiayeyang 3 жыл бұрын

love your videos

@jiayeyang 3 жыл бұрын

Keep it up!👍

@ericweis9771 3 жыл бұрын

Great info. Thanks.

@charliepayne9378 3 жыл бұрын

Can you make a video about long term capital gains tax and short term capital gains tax with fractional shares

@nobledon2686 Жыл бұрын

Thank You 👍 👌 💯

@nickphillips5390 2 жыл бұрын

If I don’t have a full share and a stock splits then they give me cash in lieu for the stock how can they sell my stock for a loss and give me cash. Why can’t I just get more fractional shares?

@ThePathbauer 3 жыл бұрын

Great Channel. Can you make a video explaining Covered Call ETF's?

@verveblack 3 жыл бұрын

are there any canadian brokers that offer realtime fractional shares? or any upcoming?

@_al_c2638 3 жыл бұрын

What about revolut, they offer fractional stocks before Ibkr, basically from the beginning of the feature introduction

@djpuplex 3 жыл бұрын

Chipotle if you think the food is costly look at CMG share price.

@kingsd2797 3 жыл бұрын

Hey I am outside of North America, Can a Individual purchase Fractional ETF's?

@lawrencer25 3 жыл бұрын

Iam in the uk . No problem 👍👍👍👍

@kingsd2797 3 жыл бұрын

@@lawrencer25 Cheers Mate!

@HeyIFoundACamera 3 жыл бұрын

How would a brokerage handle a limit order for a fractional share?

@Drevan21 Жыл бұрын

Do you actually own a stock that you started buying it in smaller pieces and you finally got around 1 share?

@bizzzzzzle 3 жыл бұрын

I don’t see anyone else saying if there are any costs associated with fraction shares compared to whole shares.

@jonmatrix2033 2 жыл бұрын

Are fractional share you buy a piece an pay it it in small amounts till you make a full share os that how it works this is what I'm confused about

@digital-rain 3 жыл бұрын

I wish Questrade would allow fractional shares!

@amaury8523 3 жыл бұрын

From the second "drawbacks", if I understand correctly, you don't own the fractionnal share but the broker does ? And so the brokers owe you this fraction of the share ?

@ThePlainBagel 3 жыл бұрын

No you still own the shares, the broker just takes the "rest" of the stock when they offer real time trading. Hope that clears it up!

@vlocash1180 3 жыл бұрын

makes me wonder if i should continue watching when little mistakes like that r made

@Techandrecharge 3 жыл бұрын

G' damn I need to invent a Time mashine.

@Tigrou7777 3 жыл бұрын

To do what ?

@Techandrecharge 3 жыл бұрын

@@Tigrou7777 To invest in BRK before it took off.

@joshgould2707 3 жыл бұрын

@@Techandrecharge or just… buy GME leaps last October

@Techandrecharge 3 жыл бұрын

@@joshgould2707 Yup that 2.

@isum9674 3 жыл бұрын

@@Tigrou7777 see what happens to bitcoin 10 yrs down the line to see if it goes up or down

@yuzuru5998 3 жыл бұрын

OUR NERD how are you!!!

@spicex4k901 3 жыл бұрын

My broker (Hatch Invest) exclusively offers fractional orders. They just ask how much money I want to put on one position and do the trade, giving me whole and fractional units. Convenient but makes my portfolio look gross with all those numbers.