Webull Fractional Shares Trading Explained In 2023

Webull, a popular online brokerage platform, offers its clients the ability to purchase fractional shares of stocks and exchange-traded funds (ETFs) through its Fractional Trading feature.

This allows investors to invest in a portion of a share of a stock or ETF, rather than having to purchase the full share.

Here's how fractional shares work on Webull.

What Are Fractional Shares?

Fractional shares are essentially a portion of a whole share, allowing investors to purchase an equity position with a quantity of less than one whole share.

For example, instead of having to purchase a full share of a stock that trades at $1,000, an investor can purchase a portion of that share for an amount they feel comfortable with, such as $10.

There are several reasons why investors trade fractional shares:

1. One of the main reasons is that fractional shares eliminate the constraint of having to buy a whole share of high-priced stocks, which can be hundreds or even thousands of dollars per share.
2. Fractional shares also allow investors with limited capital to invest in a wider range of stocks and ETFs.
3. Additionally, fractional shares lower the barrier of entry into the stock market, creating opportunities for investors at every level.

Stock Splits And Fractional Shares

In the event of a stock split, investors may receive fractional shares of a security depending on the terms and conditions of the split.

For example, if an investor held 10 shares of a security that experienced a 1:7 reverse stock split, then the quantity of their position would be adjusted into 1.42857 shares.

Dividends & Voting

If an investor holds an equity position with fractional shares included, and the underlying security pays out a cash dividend, the investor would be eligible to receive a dividend payment for the fractional shares held.

However, only whole shares are eligible for proxy voting, and the fractional piece of the position will not have any voting ability.

How Webull Fractional Trading Works

Here are some guidelines for fractional trading on Webull:

• Fractional share trading is only available for certain stocks and ETFs. The fractional share (F) logo will be displayed on the detail page indicating if a particular security is supported for fractional trading.
• Fractional share trading is only available during regular trading hours, which is 9:30-16:00 ET. Webull does not support extended hours trading for fractional shares.
• Currently, Webull only supports market orders for fractional share trading.
• There is a $5.00 minimum when purchasing a fractional share position, and the number of shares must be greater than 0.00001. For selling a fractional position, there is no minimum dollar amount, but the number of shares must be greater than 0.00001.
• Short selling is not supported for fractional share trading.
• Once a fractional trade has been entered, the open order cannot be modified.
• Fractional shares are not eligible for the Stock Lending Income Program.

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