Swissquote Enables Fractional Shares Trading

Swissquote has become the latest broker to enable fractional share trading for its customers, highlighting that trading full shares "limited clients to strategies constrained by share prices rather than their available cash."

Lowering Trading Entry Barrier with Fractional Shares

In the announcement today (Tuesday), the Swiss broker also launched a new "Saving Plan" order type and reduced trading commissions. It is now charging CHF 3 per trade for shares.

Fractional shares allow traders to purchase only a part of a whole share with whatever capital they have. This significantly lowers the entry barrier to trade. For example, Apple shares are trading at $236.5 as of press time. However, if a trader only has $100 available, they can buy $100 worth of Apple shares and will own only a fraction of the whole Apple share, thus enabling fractional share trading.

Supporting a Diverse Range of Asset Classes

Swissquote explained that traders on its platform can purchase fractions of the most popular stocks, exchange-traded funds (ETFs), cryptocurrencies, and Themes Trading products. The broker highlighted that it will convert share fractions into actual shares when the cumulative fractions reach one full unit, thus granting clients complete ownership rights of their investments.

Under the "Saving Plan," the broker allows clients to set up recurring investments, which they can further adjust based on the available funds.

"With the introduction of fractional trading and the new 'Saving Plan,' we are offering our clients unprecedented flexibility and control over their investments," said Jan De Schepper, Chief Sales and Marketing Officer at Swissquote. "This solution not only meets market demand but sets a new standard in the industry."

Although fractional share trading has become very popular, it has also attracted the attention of regulators. The Cyprus Securities and Exchange Commission recently clarified when that such investments qualify as direct share ownership under MiFID II. From next year, the Financial Industry Regulatory Authority (FINRA) will also mandate the reporting of fractional shares as a whole number.