Trading fractional shares allows you to invest in companies which you may not be able to afford the full share price. It also makes it easier for you to diversify your portfolio by allowing you to trade fractional amounts in multiple companies when you otherwise may have only been able to trade whole shares in one or two companies.

Your account is now enabled to trade in fractions, you may buy a fraction of a share based on the amount of cash you specify.

How it works:

When using a Cash Quantity order, you specify the dollar amount you want to buy instead of specifying the number of shares. Rather than buying five shares you elect to buy, for example, $500 worth of a stock. We purchase the equivalent number of shares for that value rounded down to the nearest whole share. Since your account is able to Trade in Fractions, we will buy a fraction of a share to use the full amount of cash you specified and get the greatest possible number of shares for your money. If you want to spend $500 but one share of the stock you want to buy is currently $1000, you will end up with 0.5 shares. If you would like to short a fractional share, you can do so by specifying the fractional share quantity (for example, sell .25 shares).

The ability to trade in fractions and divide your investments among more stocks also makes it easy for you to diversify your portfolio. This maximises your returns by putting small cash balances to work quicker. If you have $500 to spend you can purchase fractional amounts in multiple companies when you otherwise might only be able to purchase whole shares in two or three companies.

To use cash quantity for an order, click in the Quantity field to display the Size Wand, and toggle to USD (or relevant currency). Specify the cash amount you want to use. When the order fills, it will fill as close as possible to your specified amount, rounding down to the nearest whole share if you haven’t enabled trading in fractions. Advisors must enable this feature for their master account before clients can enable and use the feature.

Frequently Asked Questions

Will I receive a fractional share position from a corporate action?

If your account has been approved for trading fractions and a US corporate action issues fractional shares, the fractional shares will remain in your account. However, if your account does not have permissions to trade in fractions or the corporate action is issuing non-US shares or non-eligible US shares the fractional shares will be liquidated.

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Is fractional trading available for the API?

Fractional trading is not supported via API or FIX/CTCI at this time.

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Can I short fractional shares?

IBKR does support short sales in fractional shares of eligible U.S. stocks if the following conditions are met:

  • You have a Margin account
  • You have approved trading permissions for “United States (Trade in Fractions)” / “Stocks”

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What is the minimum to buy a fraction of stock?

The minimum to buy fractional shares:

  • If you enter an order using shares, a minimum of 0.0001 share must be entered.
  • If you enter an order using USD amount, a minimum of 1 USD must be entered.

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What happens if a stock becomes ineligible for fractional trading?

Interactive Brokers can, at its discretion, remove any stock from the list of stocks eligible for fractional trading:

Once a stock is removed from the list, no new positions can be opened.

Interactive Brokers will close existing positions in stocks not eligible for fractional trading. This will occur on 21st day, or as soon as practically possible after that, after the end of the quarter in which the stock became ineligible to trade in fractions.

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Do I receive dividends on my fractional shares?

Your fractional shares positions are eligible to receive dividends in the same manner as your full positions on the same stocks. The formula is the position quantity multiplied by the dividend rate (i.e. 0.85 shares x 0.75 dividend rate = $0.6375).

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Can I transfer fractional shares to IBKR?

IBKR does not accept fractional shares through a position transfer.

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What products can I trade in fractions?

U.S. stocks listed on NYSE, AMEX, NASDAQ, ARCA, or BATS, as well as OTC Pink U.S. penny stocks with average daily volume above $10 million and market cap above $400 million are available for fractional shares trading. Non-U.S. stocks are not available for fractional shares trading currently. A list of stocks that can be traded in fractional shares is available via this link. Please note, this list is subject to change without notice.

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What order types can I use with fractional shares?

The following order types are supported for fractional share orders:

  • Limit
  • Limit if Touched
  • Market
  • Market if Touched
  • Stop
  • Stop Limit
  • Stop – Trailing Stop
  • Stop – Trailing Stop Limit
  • Trailing Limit if Touched
  • Trailing Market if Touched

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Who is eligible for fractional share permissions?

Individual accounts (both standalone accounts and clients of Financial Advisors) and organizational accounts are eligible for fractional share permissions except for the following:

  • Clients with residency in Israel
  • Clients of Interactive Brokers Luxembourg SARL
  • Canadian RRSP/TFSA accounts

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