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Webull is a popular commission-free trading platform that continues to expand its features to enable new traders and those who don’t want to be burdened with hefty fees to trade. However, does this still apply if you want to buy fractional shares of stocks or ETFs?
In this article, we’ll examine Webull’s approach to fractional shares to help you determine if this could be the right platform for you.
Webull is currently offering new users 6 free stocks worth up to $12,600 for trying the platform. You’ll get two free stocks (each worth $3 – $300) for signing up, and four free stocks (each worth $7 – $3,000) for funding your account with any amount of money. Sign up for Webull through this link to be eligible for the bonus.
Does Webull Have Fractional Shares?
Yes, Webull does allow investors to buy and sell fractional shares of individual stocks and ETFs. Webull’s required minimum purchase of a fractional share is $5, and the trades are commission-free.
Webull is not the only online brokerage to offer fractional shares. Competitors like Public.com and M1 Finance support fractional shares for as little as $1. Read these comparisons to learn more about how they stack up:
Fractional shares are portions of a stock that is less than a full share. This is particularly useful when you want to buy stocks in Apple, Amazon, and other massive brands where one share can cost hundreds or thousands of dollars.
A fractional share allows you to invest in these companies without needing a hefty sum. If you want to buy just $10 of Amazon or Apple, a fractional share can allow you to do this, so you can profit from established brands.
However, there are both pros and cons associated with fractional shares that may influence whether you want to invest in this way.
Related reading: Legit Ways to Get Free Stocks
- Access Higher Growth Stocks. Fractional shares allow you to buy into high quality stocks that command a high price per share.
- Invest More. Many of us tend to carry a small balance in our brokerage accounts. You are likely to transfer a round number into your account to fund your trades. However, if you put $100 in your account and then buy six shares at $15 each, you’ll have $10 left. Rather than letting this money sit in your account, not working for you, you can buy a fractional share to boost your potential investment growth.
- Easier to Get Started. You can start with any amount of money, removing one of the most common barriers for new investors.
Webull is a free investing app that provides advanced reporting tools and allows you to make free trades of stocks, ETFs, and options. Right now Webull is offering six free stocks when you signup through our link (use the button below) and deposit any amount.
- Commission-free trades of stocks, ETFs, options, and cryptocurrency
- Buy fractional shares for any amount
- Extended trading hours
- Advanced reporting tools
- IRAs now available
- 24/7 customer service
- No Dividends. In many cases, when you buy a fractional share, you won’t get any dividends on that stock. If you read through your broker’s fine print, you’re likely to see that the broker will keep dividends on fractional shares, so you could miss out on potential payments.
- Not all Brokers Offer Fractional Trading. While fractional shares are becoming a more common investment strategy, not all brokers offer this opportunity. Fortunately, fractional shares are now available on Webull.
Up until July 2021, the lack of fractional share trading was an obvious gap in Webull’s services. While the platform did offer commission-free trading, the lack of fractional shares made it difficult for those with limited funds to invest with the big boys.
For example, Amazon shares currently run at approximately $3,000 each, which places them out of reach for someone who can only afford to invest $100 a week as a part-time investment strategy.
Fortunately, this feature is now available with Webull. Like most other aspects of Webull investing, the process is quite straightforward.
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Assuming you already have a Webull account, you can buy fractional shares in the same way you submit a regular order. When you’re considering a company or equity to invest in, you just need to look for the fractional share indicator. This is a green diamond icon that appears on the stock details page. Fractional shares are available for both stocks and ETFs, so you don’t need to be limited to investing in an individual company.
When you place your order, switch the order type to “Market” and specify the fractional amount you wish to trade. Currently, you cannot simply enter a dollar amount, but this is scheduled to be optimized in the near future. For now, you’ll need to specify a fraction, so you’ll need to get your calculator out to make sure it is in your targeted money amount.
If you want to have a fractional position with an attached whole share, you need to place the two orders separately. For example, if you want 1.5 shares of Chipotle, you’ll need to buy one share and then place another order for 0.5 shares.
You can then submit your orders as usual. Just bear in mind that to qualify for fractional shares, you need to spend a minimum of $5 on at least 0.00001 shares.
Read our Webull review to learn more about the platform.
As with regular stocks and ETFs, Webull does not charge a commission when you’re trading fractional shares. This is another plus point for the platform, so you don’t need to factor fees into how much you can afford to spend on your fractional shares.
You also don’t need to worry about inactivity or account management fees, so you can make the most of your investment capital. However, there may be FINRA or SEC fees that apply to your trade, so be sure to check the relevant terms before you place an order.
Frequently Asked Questions
Webull only offers market orders for fractional trading during normal trading hours. This rule currently applies, so you will need to stick to regular market hours and not rely on trading during extended hours.
Unfortunately, while Webull welcomes you to transfer your portfolio from another brokerage platform, it does not currently allow the transfer of fractional shares from another platform. So, if you already have fractional shares, you will need to check the transfer terms with your current brokerage platform. You may need to keep your existing account open and initiate a partial transfer or sell your fractional shares and have the resulting cash transferred across to Webull.
Webull is certainly a solid trading platform that allows you to participate in traditional stock trades and purchase partial shares without needing to pay trade commissions.
In an ideal world, you may want to own hundreds of blue-chip stocks, but with the price of Amazon, Microsoft, Tesla, and other high profile brand shares so costly, it will take time to build up your portfolio.
However, with Webull fractional share trading, you can still invest in these market leaders and get a piece of the high-value stocks that would have previously been out of your reach. So, you can get started building your high-profile portfolio today.