If you are a beginner investor starting off with a little money, fractional shares can be very helpful. In this article, we dive into this latest feature added on Wealthsimple Trade and also a little bit into what fractional shares are.

I have been personally using Wealthsimple Trade for over seven months at this point and I absolutely love it, mainly for the commission-free trades it offers. This means buying and selling shares without paying additional costs to the institution. Especially if you start off with little money, every cost saved is money invested.

Anyway, back to the topic at hand.

Fractional Shares are exactly what they sound like. They are a fraction of a share or a part of a share. For example, you will have the ability to buy 50% or 20% or 10% of 1 share of a company.

Trading fractional shares really come in handy when you want to trade share prices that are quite high. For example, the world-renowned -e-commerce giant Amazon is trading at USD 3,354 at the time of this article. Yes, to own one share of Amazon, you have to pay US$3,354 or CA$4,205. This is a massive amount! What if you only had $1,000 to invest.

This is where fractional shares come in handy. With your $1,000, you can buy approximately one-third (1/3) of an Amazon share. Any growth in Amazon share price will be allocated to your fractional share on a pro-rated basis.

Fractional shares on Wealthsimple Trade

Fractional shares are the latest feature to be added on Wealthsimple Trade. So, there are a lot more improvements to be expected in the future.

For example, there is a very limited portfolio of shares you can trade as fractional shares on Wealthsimple Trade. These are;

• Shopify (SHOP)
• Toronto Dominion Bank (TD)
• Canadian National Railway Co. (CNR)
• Amazon (AMZN)
• Google (GOOGL)
• Apple (APPL)
• Microsoft (MSFT)
• Facebook (FB)
• Netflix (NFLX)
• AirBnB (ABNB)
• Coinbase (COIN)
• Nvidia (NVDA)

Some of these picks are difficult to justify as to why they were added to fractional shares. But, we aren’t about to question a good thing in progress.

How to trade fractional shares on Wealthsimple

You can either manually look for these companies on Wealthsimple or you can look for the separate category they have created on the app.

You can easily identify a stock eligible for fractional trade with the icon of a pie with one slice separated from the pie. It looks like this.

So, look for this symbol right next to the company name to know if the stock is eligible for fractional trading. This symbol does NOT mean you are trading fractional shares.

To buy a fractional share follow the below steps;

1. Click on the company you want to buy the share,
2. Click ‘Buy’,
3. Select with which account you want to buy with (only if you hold more than one investment accounts in Wealthsimple),
4. Click ‘Next’,
5. At the top of the screen click on ‘Market buy’ and a drop down should appear,
6. The drop down shows all different types of buy types possible. Select ‘Fractional Buy’ from the list,
7. If a information panel pops up, read it, and click ‘Continue’ or ‘Don’t show this again’,
8. Type in the $ amount (i.e. NOT the number of shares) you want to spend,
9. Wealthsimple will automatically calculate what fraction or percentage of a full share you can purchase with the amount you entered,
10. If you are satisfied, click ‘Continue,’ and confirm the order,
11. The order is sent and you will receive a confirmation soon after.

To sell a fractional share, the steps are quite similar. Just select the share you want to sell. On the screen you need to enter the number of shares to sell, click the drop-down at the top of the screen, and select ‘Fractional Sell.’ Then enter the fraction you want to sell (i.e. NOT the $ value). Then click continue and confirm.

Yes, it is that easy.

Let us know if you have any questions down in the comments below. We will try our best to help you.