How to Buy Fractional Shares on tastytrade
The concept of fractional shares has revolutionized trading, making the stock market more accessible to a larger number of investors.
tastytrade, a popular trading platform, has embraced this innovation, offering its users the opportunity to trade fractional shares.
Unpacking Fractional Shares
Fractional shares represent a portion of a whole share. They offer a cost-effective entry point for investors, particularly when it comes to high-priced stocks.
By allowing investors to purchase less than one full share, fractional shares have made it possible for more people to diversify their portfolios and own a piece of their favorite companies, regardless of the stock price.
Fractional Shares Trading on tastytrade
tastytrade supports the buying and selling of fractional shares. You can also accumulate fractional shares on tastytrade in several ways: through dividends, Dividend Reinvestment Plans (DRIP), corporate actions, or account transfers (ACATs).
On tastytrade, updates to fractional shares appear on the dividend payable date or the settlement date of the corporate action or ACAT.
Nitty-Gritty of Fractional Trading on tastytrade
When trading fractional shares on tastytrade, there are certain specifications users should be aware of:
Only market orders are supported, and they must be DAY Time in Force (TIF) orders
The minimum purchase amount equates to $5.00 worth of shares
The maximum purchase quantity is restricted to 0.99 shares
Trading of fractional shares is not available for pre-market or after-hour sessions
Shorting of fractional shares is not permitted
For a deeper dive into the features of tastytrade, check out our comprehensive comparison between tastytrade and Robinhood.
Commissions and Fees on tastytrade Fractional Shares
Trading fractional shares on tastytrade comes with zero commission fees to open or close a position. However, a $0.10 per transaction clearing fee applies, offering a cost-effective trading solution for those looking to expand their investment portfolio.
How tastytrade Displays and Closes Fractional Shares
On tastytrade, both whole and partial shares appear on the user's Positions tab. To close a position, users need to submit two separate orders: one for the whole share amount and another for the fractional share amount. This is because orders combining whole and fractional shares can lead to errors or rejections.
Fractional Trading's Future on tastytrade
As of now, the trading of fractional shares is supported on tastytrade's Desktop and Mobile platforms. The future, however, will see the introduction of web-based fractional trading, allowing for an even more flexible trading experience.
How Does tastytrade Stack up Against Other Platforms?
tastytrade's introduction of fractional shares trading places it among the leading trading platforms, offering users enhanced trading flexibility. For an in-depth analysis of tastytrade's features compared to other platforms like Robinhood, refer to our comparative review.
Tastytrade Disclosure
tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Marketing Agent (“HaiKhuu LLC.”) whereby tastytrade pays compensation to HaiKhuu LLC. to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of HaiKhuu LLC. by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of HaiKhuu LLC. or this website. tastytrade does not warrant the accuracy or content of the products or services offered by HaiKhuu LLC. or this website. HaiKhuu LLC. is independent and is not an affiliate of tastytrade.
tastytrade was previously known as tastyworks, Inc.
