Fidelity lets clients now trade fractional shares of stocks and ETFs

[mighty72]

It got enabled for me too but says that fractional orders can be placed only during market hours. I will try tomorrow

I was able to execute the trade. $100 worth of ITOT. It was a limit order. Now, if I could figure out how to do this every month automatically.

[TheTimeLord]

I can see using this to do a stock version of Draft Kings in my portfolio. Yep, this will lead to nothing good on my end, but probably quite fun.

[MotoTrojan]

I can see using this to do a stock version of Draft Kings in my portfolio. Yep, this will lead to nothing good on my end, but probably quite fun.

M1 Finance has allowed a super seamless way of doing just this for quite some time.

[ElJefeDelQueso]

It got enabled for me too but says that fractional orders can be placed only during market hours. I will try tomorrow

I was able to execute the trade. $100 worth of ITOT. It was a limit order. Now, if I could figure out how to do this every month automatically.

Just showed up in my app in the past hour.
Agree auto/scheduled trades would be a major step forward. I use ETFs and am not a fan of manual trades during market hours.

[TheTimeLord]

I can see using this to do a stock version of Draft Kings in my portfolio. Yep, this will lead to nothing good on my end, but probably quite fun.

M1 Finance has allowed a super seamless way of doing just this for quite some time.

I think there have been lots of way I could have gotten into this kind of trouble/fun in recent years, but never with anyone I was using before.

[dollar_elbow]

It was enabled on my account today and it works for buying Vanguard etfs. It seems there is little reason to bother with mutual funds anymore.

I should note that you have to view the yellow info panel that appears just before you place your first fractional purchase (usually you can ignore them as it’s just prospectus info), otherwise the trade won’t go through.

[1789]

Worked today. Bought some VTI.

[ChrisBenn]

I put in a market order denominated in us dollars which mapped out to 235.251 shares of an etf with a ~$0.06 bid/ask spread. One lot at 100 filled at $.003 over the midpoint and another lot of 135 filled at $0.002 over the midpoint. The .251 fractional shares filled exactly at the ask.

The midpoint fills are consistent with what I got with previous share denominated market orders.

I'm totally fine with this, since the fractional share price higher cost only impacted the fractional portion -- just found it interesting.

[bck63]

Still waiting.

[jhfenton]

I put in a market order denominated in us dollars which mapped out to 235.251 shares of an etf with a ~$0.06 bid/ask spread. One lot at 100 filled at $.003 over the midpoint and another lot of 135 filled at $0.002 over the midpoint. The .251 fractional shares filled exactly at the ask.

The midpoint fills are consistent with what I got with previous share denominated market orders.

I'm totally fine with this, since the fractional share price higher cost only impacted the fractional portion -- just found it interesting.

Thanks for the detail. I've been curious about execution, but not many folks have shared the details yet.

[bogledogle87]

Placed my first fractional order for VT in my HSA yesterday with no problem. I’m pretty excited about this. With the ability to trade fractional shares, there is also no reason not to automatically reinvest dividends at Fidelity, either. Previously it was quite difficult to sell fractional shares.

Now, You can essentially turn any stock or etf into a mutual fund under these circumstances, which is a game changer. All they need now is to enable automatic investment of dollar amounts into ETF’s which I hope may be a future enhancement. I’m very curious If the other brokers will follow suit.

[1789]

Only thing left is automated ETF investing. Are we going to see that soon?

[jhfenton]

Only thing left is automated ETF investing. Are we going to see that soon?

I think I asked earlier in the thread, but how would folks expect this to work? Would they limit it to Market or Limit on Open (MOO or LOO) or Market or Limit on Close (MOC or LOC) orders? Would they give you a choice between the two? Or would you be able to specify a time for your order? Would they limit automatic investment to the most liquid ETFs where there would never be a risk of a failed opening or closing auction or where they could pool purchases (as with dividend reinvestments)?

There are enough complications to consider with automatic ETF investments to make me believe it will be a while. I certainly wouldn't expect to see it from a major brokerage this year.

[1789]

I really don’t know how it will work. I look at it from a business perspective and so believe that someone over their is thinking the details on how to make it work.

[UpperNwGuy]

I’m very curious If the other brokers will follow suit.

If Vanguard is really serious about wanting its customers to transition from mutual fund accounts to brokerage accounts, they should implement this fractional ETF share strategy quickly.

[bogledogle87]

I’m very curious If the other brokers will follow suit.

If Vanguard is really serious about wanting its customers to transition from mutual fund accounts to brokerage accounts, they should implement this fractional ETF share strategy quickly.

I would love to see this. I might actually consider switching to fidelity down the line if they do not. What is interesting is that fractional share ETF trading at vanguard could almost negate the need for their mutual funds entirely for a retail investor, especially if they allowed automatic dollar purchasing. Why would you need a mutual fund anymore? If implemented, I could see the MF customer base shifting exclusively toward institutional and retirement plans

[jhfenton]

I would love to see this. I might actually consider switching to fidelity down the line if they do not. What is interesting is that fractional share ETF trading at vanguard could almost negate the need for their mutual funds entirely for a retail investor, especially if they allowed automatic dollar purchasing. Why would you need a mutual fund anymore? If implemented, I could see the MF customer base shifting exclusively toward institutional and retirement plans

It's definitely a major plus for Fidelity. I was talking to our 17-year-old last night, and we're going to open a Roth IRA for him now that he has a job (hardware store). He started after Thanksgiving and only made $300+ dollars in 2019, so his 2019 contribution will be small. (He plans to contribute half of his earnings. ) The ability to buy fractional shares will be a major plus, whatever he decides to buy.

[JamesSFO]

It's now available to me in mobile only when I did "quick trade".

[ftobin]

I think I asked earlier in the thread, but how would folks expect this to work? Would they limit it to Market or Limit on Open (MOO or LOO) or Market or Limit on Close (MOC or LOC) orders? Would they give you a choice between the two? Or would you be able to specify a time for your order? Would they limit automatic investment to the most liquid ETFs where there would never be a risk of a failed opening or closing auction or where they could pool purchases (as with dividend reinvestments)?

There are enough complications to consider with automatic ETF investments to make me believe it will be a while. I certainly wouldn't expect to see it from a major brokerage this year.

I can pretty much guarantee they'd be MOC or VWAP orders, for a slew of reasons, including that it would be easier for Fidelity to hedge. My former employer 401k had dollar-denominated transactions for company stock, probably done has MOC (never really bothered to find out).

[Texanbybirth]

Very satisfying to put all cash to work today in our Roth IRA @ Fidelity. I bought fractional shares for this month's contribution with no problem. A welcome improvement!

[ChrisBenn]

I think I asked earlier in the thread, but how would folks expect this to work? Would they limit it to Market or Limit on Open (MOO or LOO) or Market or Limit on Close (MOC or LOC) orders? Would they give you a choice between the two? Or would you be able to specify a time for your order? Would they limit automatic investment to the most liquid ETFs where there would never be a risk of a failed opening or closing auction or where they could pool purchases (as with dividend reinvestments)?

There are enough complications to consider with automatic ETF investments to make me believe it will be a while. I certainly wouldn't expect to see it from a major brokerage this year.

I can pretty much guarantee they'd be MOC or VWAP orders, for a slew of reasons, including that it would be easier for Fidelity to hedge. My former employer 401k had dollar-denominated transactions for company stock, probably done has MOC (never really bothered to find out).

I find M1's implementation pretty reasonable - a trade at a target time window - after open. I think it was 10:30 central?.

[ftobin]

I find M1's implementation pretty reasonable - a trade at a target time window - after open. I think it was 10:30 central?.

That's great if brokers can keep cost down and provide that functionality. Generally there is much more liquidity near at EOD, so there's more liquidity to hedge with during that time (fractional shares necessitate that the broker act as the counterparty, and they'll hedge it away).