Fractional shares

Fractional shares on Stake AUS

Unlike U.S. stock exchanges, trading fractional shares on the ASX under the CHESS model is not possible.

If you have purchased fractional ASX shares on another investment platform, it’s likely that they operate on a Custodial model. The broker would hold entire shares under their HIN and assign fractions to investors.

You can learn more about the difference between the CHESS and Custodial models here.

Fractional shares on Stake Wall St

With Stake, you have the opportunity to buy a fraction of a company’s stock instead of having to pay the full amount to own one full share. While many stocks are priced in the hundreds of dollars per unit, fractional shares allow you to invest with a fraction of the stock. 

Orders and execution

When buying fractional shares, you set the dollar value of your investment (e.g. US$100 of TSLA). When selling, you’ll enter the number of shares you wish to sell (e.g. 4.3142 shares of TSLA). Please note that fractional shares can only be traded using Market or Stop orders. If you submit a market order for a whole share i.e. 1 unit at market, you may receive a fractional quantity that is just above or just below the whole unit share (e.g. receive 0.99 share rather than 1 share).
You can read more about different order types here.

You may receive multiple confirmations if your trade contains more than one full share. For instance, if you sell 3.4563 shares of TSLA, the fractional and whole share components will appear on separate trade confirmations.  

Fractional orders are subject to the NBBO (National Best Bid Offer) regulations of the U.S. market which means you'll generally get the best possible fill for your trade at the time of execution, no matter the size of your order. 

Our broker has undertaken to comply in all respects with its regulatory best execution requirements on all orders it executes for the clients, however, best execution requirements take into account a number of factors (not only the price) for example, likelihood of execution and settlement, speed of execution, costs, size, nature of the market, volatility, and liquidity.

Ownership

Fractional shares carry the same level of ownership as full shares do. Your holdings are registered and held in your name via the custodian model in the U.S. When you submit an order for less than one full share, our broker-dealer DriveWealth will purchase a whole share and designate you as the owner of your fraction.

You retain beneficial rights (voting, dividends etc) as a fractional shareholder. You can read more about U.S. share ownership here as well as our U.S. broker partner’s fractional shares disclosure.