I want to purchase whole numbers of shares and not fractional shares. When I go to the buy screen I have to put in an amount. Even if I keep tweaking the amount so it gives me 1 share, after purchase it is still not exactly 1 share and will be for example 1.0002343.
Why can’t I just enter the number of shares rather than having to enter a monetary amount? Is there a way around this, its very annoying.
It doesn’t have to be one or the other. It should be made possible to select whole shares or fractional. I’m also in camp where I would generally like to buy whole shares and would only use fractional for taking a position in like Google or something with a high value
Now I have got my head around fractionals, I would never go back to whole shares given the choice.
For example buying a UK listed stock using whole shares:
If I want to increase my position in stock X by £200 but the price is £24 per share, I have to choose to buy either 8 shares totalling £192 or 9 shares totalling £216.
At the end of the transaction I own whole shares but I have compromised my investment goals buy either buying more or less than I intended.
If the stock was listed in the US, I could buy exactly £200 worth of stock X. Exactly the amount that I wanted.
When balancing a portfolio it is far easier and more accurate to use fractionals.
To become a better investor, it is important to remove as many psychological barriers to good decisions as possible. Whole shares is one of those psychological barriers.
You’ve just wasted the 0.5% stamp duty though, and also FX fees if it’s a foreign stock.
Re psychological barriers, it also may affect your ability to transfer all your shares to another broker, as they may not support fractionals. I also personally will probably only own whole amounts as then i can do the maths in my head quicker, when looking at share prices. I also don’t inherently trust any system that is giving me a percentage of something, for example, it’s not easy for me to know whether I’m losing a small amount of my money by purchasing a fractional, and do I know for sure that I will receive the exact proportional dividend amount. Nothing against Freetrade, it’s just harder for me to verify this.
With competing broker(s) it is possible to select between fractions or whole shares, which is making me lean towards using them. I think I read that Freetrade said they will offer the option to select? Someone can correct me if wrong.
Also say I own 0.01 fraction of a £1 share, if that share price rises to £1.001 and I sell, how do i get the cash in a denomination that doesn’t exist at that accuracy.