Webull Fractional Shares – All You Need To Know
So, you’ve been thinking about investing in one of the blue-chip stocks available on the stock exchanges in the US? Maybe you’ve been looking at some other stocks, but you don’t want to invest a lot of money, at least not at first.
Either way, the solution is to buy fractional shares and the good news is that the popular stock trading platform, Webull, has introduced fractional share trading on its mobile platform in July 2013.
In this post, we’ll look at its offering in more detail including how it works, position sizing, trading times, orders, commissions, and more.
What Are Fractional Shares?
As the name suggests, fractional shares allow you to buy less than one full share of an equity. So, you could almost think of fractional shares as shares in a share. This means you don’t buy shares in full share increments, but rather for a specific amount.
To illustrate this concept better, let’s look at a simple example. Let’s say you want to invest in Amazon which currently trades at about $3,200 per share, but you only have $500 available. With normal shares, you wouldn’t be able to invest, but fractional shares would allow you to. In effect, you would buy just over 15% of one Amazon stock.
Likewise, if you had $5,000 available to invest, you could buy one full Amazon share and invest the remainder in fractional shares. The main benefit of this is that more stocks are available for you to invest in which, in turn, increases your opportunities for making a profit and diversifying your portfolio.
Can you buy fractional shares on Webull? Yes, the company offers fractional shares for most stocks and ETFs.
Webull Fractional Shares Trading Rules
As mentioned earlier, Webull introduced fractional trading on their platform in January 2023. There are, however, certain trading rules applicable to fractional share trading which include:
Platform. Fractional share trading is currently only available on the Webull Mobile platform.
Instruments. Webull fractional shares are only available for certain stocks and ETFs. To find out whether a specific stock or ETF is available for fractional share trading, you need to look at the detail page for the specific stock or ETF. If fractional trading is available, this will be indicated by the fractional share logo (a green diamond icon) on the page. Also, note that the list of the available equities and ETF is subject to change
Orders. At this stage, Webull only supports market orders for fractional share trading and, once an order has been entered, you won’t be able to modify it. Also, short selling is not allowed when trading fractional shares on the platform.
Day trading. You are allowed to day trade fractional shares, but you’ll be subject to the same rules that regulate day trading with regular stocks. As such, if you have a margin account, you should maintain a minimum balance of $25,000 to execute more than four trades in five days. If not, your account could be flagged as a pattern day trader account.
Dividends. Like normal shares, you’ll be able to earn dividends on fractional shares. In this case, you’ll earn dividends in the proportion of the share you own.
Position Size. When trading fractional shares, there’s a minimum position size of $5.00 and the number of shares bought must exceed 0.00001 shares. When you want to sell your fractional shares, there’s no minimum dollar amount required but the number of shares should exceed 0.00001.
Trading time. At this stage, Webull fractional shares are only available to trade during regular trading hours. In other words, you’ll only be able to trade fractional shares from 9h30 to 16h00 EST.
How to Trade Fractional Shares
When you want to trade fractional shares on Webull, you’ll start by picking the stock or ETF you want. As mentioned earlier, if fractional trading is available for the stock or ETF, this will be indicated by the fractional shares logo on the detail page of the relevant instrument.
Next, you’ll switch the order type to Market. Then, tap on the whole share button and change the option to Fractional Share. You’ll now be able to enter the number of shares you want to buy. Once done, you can submit your order. As mentioned earlier, once submitted, you’ll not be able to change the order.
It’s also important to note that, at this stage, you’re unable to enter a dollar amount in respect of the fractional order. Also, when buying fractional shares of more than one share, you’ll have to enter two orders separately, one for the whole share and one for the fractional order.
Can I Trade Webull Fractional Shares During Extended Hours?
As mentioned earlier when dealing with the rules, fractional shares trading on Webull is only available during regular market hours. So, no, you’ll not be able to trade Webull fractional shares during extended hours.
Is Webull Fractional Share Trading Free?
Like with their regular stocks and ETFs, Webull doesn’t charge any commissions when you trade fractional shares. In addition, there are no account management or inactivity fees. Keep in mind, though, that the relevant SEC and FINRA fees may apply to a trade.
FAQs
Hopefully, this information proved helpful in showing you what fractional shares are and how you’re able to trade fractional shares on Webull. Here, we also answer some frequently asked questions traders and investors often have.
Can you buy fractional stocks on Webull?
Yes, Webull does offer fractional shares trading for many popular stocks.
Why can't I buy fractional shares on Webull?
If you are unable to buy fractional shares on Webull, it could be due to a few reasons: firstly, the stock you are trying to purchase may not be eligible for fractional share trading on the platform. Additionally, fractional shares trading may be limited to certain account types or investment products offered by Webull.
Why should I buy fractional shares?
Fractional shares are an excellent way to diversify your portfolio with stocks you might not be able to buy outright. Also, because you might be exposed to more stocks, you’ll increase your opportunities for making a profit.
Can I transfer my fractional shares to Webull?
Unfortunately, you’re not able to transfer any fractional shares to Webull.
Are fractional shares harder to sell compared to full shares?
On Webull, you sell fractional shares just like you would any other stock or ETF.
What’s the minimum amount of fractional shares I can buy on Webull?
You can buy fractional shares on Webull for as little as $5.
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Team that worked on the article
Peter Emmanuel Chijioke is a professional personal finance, Forex, crypto, blockchain, NFT, and Web3 writer and a contributor to the Traders Union website. As a computer science graduate with a robust background in programming, machine learning, and blockchain technology, he possesses a comprehensive understanding of software, technologies, cryptocurrency, and Forex trading.
Having skills in blockchain technology and over 7 years of experience in crafting technical articles on trading, software, and personal finance, he brings a unique blend of theoretical knowledge and practical expertise to the table. His skill set encompasses a diverse range of personal finance technologies and industries, making him a valuable asset to any team or project focused on innovative solutions, personal finance, and investing technologies.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.
Olga has extensive experience in writing and editing articles about the specifics of working in the Forex market, cryptocurrency market, stock exchanges and also in the segment of financial investment in general. This level of expertise allows Olga to create unique and comprehensive articles, describing complex investment mechanisms in a simple and accessible way for traders of any level.
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