Revolut explains fractional shares

Academy · 9 April 2020Elizabeth McGrath

At Revolut, we believe that investing in the stock market should be accessible to everybody; including how we talk about it. This means explaining the previously complex world of trading in the simplest of terms, that everyone can understand. Don’t worry if it feels alien right now. We’ll be breaking everything down for you post by post, and you’ll feel more confident in no time. So let’s get down to business with one of our core features: fractional shares.

What exactly are fractional shares?

A fractional share is just that: a fraction of a whole share. Companies issue whole units of stocks, called shares, which are then traded on the public market for investors – like you – to buy. If you buy a fractional share that means you’re buying a little piece of a company’s stock – a fraction of it.

Think of a company like a pie. If you want the pie to go further then you would cut it up into quarters or eighths and so on. The value of the overall pie remains the same, but the slices are worth less and less the more you divide them. That’s all fractional shares are really: tiny slices of tasty company pie.

The more valuable a company is, the higher the share price can be. This is true for the best-known companies in the world. As of August 2021, If you wanted  to  buy just one share of Tesla,  you’d have to splash out over $250 for a full share. If you want a share of Amazon you’re looking at over $1000!

Of course not everyone can afford these prices. Which is why we offer fractional shares: so that everyone can own a small piece of these international companies. You might only have 0.001% of a share, but you still own a piece of that company and we think that’s pretty exciting!  It’s a starting point from which you can build.

What are the benefits of fractional shares?

The industry is finally modernising, with fractional shares being a key disruptor in the stocks and shares investing space. Thanks to fractional shares, the stock market is now open to everyone. Online trading platforms – like ours – that offer fractional share trading from as little as $1, are giving everyone the opportunity to start growing their personal wealth. This is known as micro-investing.

Fractional shares offer flexibility because you can easily invest in multiple companies and industries, using small amounts of money. This allows you to build up a diverse portfolio of investments at a pace that suits you and your budget.

How does fractional share trading work on Revolut?

Trading with Revolut is quick and easy, and you can get investing from as little as $1.

Buying and selling shares happens almost instantly at the tap of a button; simply enter the amount you want to buy or sell in dollars (no need to enter the specific quantity of shares). See real-time prices and trade during US market hours, from 9:30am - 16:00pm EST.

Our news feature (found when you scroll down under each individual stock screen) means you can see the latest news relating to the companies you’re interested in. This should help you make more informed investing decisions. We all know that knowledge is power, so read up.

We're delighted to say that all Revolut customers can now benefit from commission-free trading within their allowance. Our Metal customers enjoy unlimited commission-free trading. Premium customers have 8 commission-free trades a month, Plus customers have 3 commission-free trades a month, and Standard customers have 1 commission-free trade a month (Any trades outside of your monthly allowance are charged the greater of 0.25% of the Order amount or the minimum country-specific fee). We also don’t batch your orders at the end of the day like some other brokers do.

If you’re interested to know how fractional shares work ‘under the hood’ of our app, then stay tuned as we will be sharing some of our engineering secret sauce soon. We’re always adding to our stocks list, so keep checking back to see what’s new and look out for European and UK stocks, which are on the roadmap in 2021.

Capital at risk.
This stock trading platform is facilitated by Revolut Trading. Neither Revolut nor Revolut Trading provides investment advice and individual investors should make their own decisions or seek professional independent advice if they are unsure as to the suitability/appropriateness of any investment for their individual circumstances or needs. The value of investments can go up as well as down and you may receive less than your original investment or lose the value of your entire initial investment. Past performance is not a reliable indicator of future results. Currency rate fluctuations can adversely impact the overall returns on your original investment. Any trades outside of your monthly allowance are charged the greater of 0.25% of the Order amount or the minimum country-specific fee – see our Trading FAQ for your equivalent. An annual account management fee of 0.12% / 12 bps (annually) of the market value of your assets held by the Third Party Broker is charged monthly. Please read more on these fees here. Learn more by reading our full Risk Disclosure and our Trading FAQ. You can also download this Quality of Execution report and Top Five Venues report.

Revolut Trading Ltd (FRN 832790) is an appointed representative of Resolution Compliance Ltd (FRN: 574048) which is authorised and regulated by the Financial Conduct Authority. Revolut Trading Ltd’s registered address is: 7 Westferry Circus, Canary Wharf, London, England, E14 4HD.

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