CapTrader: CapTrader’s customers will be even more flexible in the future. The Düsseldorf online broker is now also offering trading in fractional shares.
Fractional shares are fragments of expensive stocks. Their high quotation has so far not made these values meaningfully tradable for some market participants.
“With Fractional Shares we are now significantly expanding the range of shares for such investors,” says Christian Weiß, Managing Director at CapTrader.
Up until now, a high-priced stock not only had the disadvantage that it exceeded the financial resources of some investors.
A company whose share has a high price per paper is also unsuitable for smaller portfolios for strategic reasons, among other things because a balanced diversification cannot be carried out with it: A single high value would take up too large a share of the overall portfolio, the cluster risk would be too high great.
However, a broad diversification is essential, especially in terms of risk management. Fractional shares now make this possible due to their much lower price. “As with traditional shares, fractional shares allow the customer to benefit from the performance of a promising listed company – but without foregoing sustainable risk management,” explains Andreas Weiß, also managing director at CapTrader.
In addition, fractional shares allow the respective investment amount to be set much more precisely than before.
He gives an example: “If a single piece of paper like Amazon shares costs almost $ 3,500, it is rather unsuitable for a portfolio that has a total volume of $ 20,000. If, on the other hand, the investor buys a fractional share from Amazon, which, for example, comprises a fraction of a tenth of the actual share, nothing speaks against a commitment from the point of view of diversification. “
Christian Weiß adds: “It is important to us that we provide all of our customers with ideal conditions for extensive activities on the stock exchange and for effective trading. With fractional shares, we give you meaningful access to even more stocks – and thus to even more opportunities to be successful on the capital market. “
What makes fractional shares also interesting for investors: Buyers can receive dividends on their fractions of shares in the same way as on full positions in the same shares.
Monthly stock savings plans can also be implemented with fractional shares. In addition, CapTrader supports short sales in fractional shares, as long as customers can deposit the margin and have trading authorization.
For the time being, CapTrader offers trading in fractional shares exclusively in the area of US stocks. This applies to stocks that are listed on the NYSE, AMEX, NASDAQ, ARCA or BATS stock exchanges, as well as OTC Pink US Penny Stocks with an average daily volume of more than ten million US dollars and a market capitalization of more than 400 million US dollars.
There are no additional fees for trading fractional shares; the standard commissions for US stocks apply.
Also read: CapTrader now also offers fractional share trading
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