Fractional Shares: Get a Slice of Your Favourite Companies
Stocks & ETFsWe’re excited to launch fractional shares on BUX! Fractional shares mean you can buy a slice of a full stock, making it even more affordable to invest with small amounts.
- You can now buy a fraction of a share.
- Available on US stocks
- Start with as little as €10.
Fractional shares solve a big problem
We started BUX with a mission to make investing accessible and affordable to everyone. We cut the fees down to zero and made it simple to buy stocks.
But there’s still a problem: the shares themselves can be expensive. For example, one share of Amazon costs $3,488. Google is $2,900, and Tesla is $1,050.
Most new investors don’t have thousands of dollars to buy these popular shares. And building a diverse portfolio of 10-20 stocks would be almost impossible with a small budget.
With fractional shares, that all changes. Now you can buy a slice of Amazon stock for just €10. Best of all, it allows you to build a diverse portfolio of stocks by investing small amounts in lots of different companies.
How does it work?
When you purchase a stock on the BUX app, you’ll now get the option to place your order using a cash amount.
You can enter as little as €10 and we’ll buy as many fractions as we can for that amount. Let’s say a company’s stock is listed at €1,000 and you want to buy €200 worth. You’d then own 0.2 (20%) of a share.
Alternatively, you can enter a specific number of fractional shares you’d like to buy, such as 0.1 share or 0.25 shares.
Which stocks are available for fractional shares?
At the moment, we’re launching with a number of big US stocks so you can try it out with tech names like Google and Amazon. We’ll later roll it out to more US stocks, European stocks, and ETFs.
Fractional shares are currently only available with market orders (which means buying the shares immediately at the best available market price). We’ll also introduce it to our Investment Plans at a later date.
What about dividends, voting rights, and stock splits?
Fractional shares are still eligible for dividends, but they’ll be proportional to the amount you own. For example, if you hold 0.5 shares of Apple, you’ll receive 50% of the dividend. Note: this won’t apply if the amount is too small (we can’t pay a fraction of a cent, for example).
The same logic applies for stock splits. If you hold 0.5 shares in Apple and the stock goes through a 2:1 split, you’ll then own 1 full share.
Users still have voting rights where applicable and BUX will aggregate the votes. We will round down to the nearest whole share when reporting.
Please note: your fractional shares are not transferable to another broker. If you close your account, your fractional shares will need to be sold.
Trade execution
As always, we’ve made the process as simple as possible for you, but here’s what’s happening behind the scenes.
Let’s say you purchase 0.7 shares of Apple with BUX. We might buy 1 full share on the market and credit your account with 0.7 shares. We’ll keep the remaining 0.3 on the fractional book. If someone else later orders 0.3 shares, we can sell them straight from the fractional book.
Now let’s say you want to sell 1.5 Apple shares. We might sell 1 full share straight into the market, and buy the other 0.5 from you to keep on the fractional book.
These are simplified examples and the trade could play out in many different ways, depending on the circumstances. But you get the basic idea. Unlike some brokers, we don’t aggregate fractional orders. Every trade is treated as a separate order.
So go try it out. Get a slice of your favourite companies and build a diverse portfolio.
All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.
