With Stash, you can invest in a curated selection of exchange - traded funds (ETF's) or
purchase fractional shares of stocks through a mobile platform.
What makes Capital One Investing so intriguing is that members can
purchase fractional shares of a stock.
Not exact matches
ETFs, unlike mutual funds, are bought and sold like a
stock and consequently have trading costs and other fees to allow the
purchase and sale
of fractional shares.
Also from employee
stock purchase programs that invested an exact number
of dollars and bought
fractional shares.
The broker can split the bid - ask spread with the investor when matching buy and sell orders - a win - win situation in most cases Since investor money is pooled before
stocks are bought or sold, it enables investors to contribute small amounts
of cash using which
fractional shares of specific
stocks can be
purchased.
Investors can leverage the benefits
of trading
fractional shares by getting access to
stocks that they normally would not be able to afford if they were forced to
purchase whole
shares.
Fractional shares can be advantageous when you don't want to spend a lot
of money on a trade, but wish to
purchase a
stock that has a higher price per
share.
Some organizations allow you to set up monthly
purchase plans to buy fixed dollar amount
of stock resulting in
fractional shares.
DRIPs usually have no commission attached, sometimes allow for
fractional share purchases, and increase your stake
of ownership such that you receive a bigger payout and thus more
shares of stock, in a repeating pattern.
As a result, DRIP investors
purchase as many whole and
fractional shares as the amount entitles them to, based on the price
of the
stock on the investment date.
The rights allow a holder to
purchase at exercise 1/3
of a
share of Rouse common
stock at $ 15 per
share (with no
fractional shares to be distributed).
This means that the investor
purchases, say, $ 100 worth
of stock «ZZZ,» and ends up with some very odd, and often
fractional, number
of shares.
The ability to
purchase fractional shares with a small minimum and the lack
of fees far out weighs not having the ability to time the market and choosing from a smaller pool
of stocks in my opinion.