what is a fractional share 
less than one full share of equity is called a fractional share such shares may be the result of stock splits dividend reinvestment plans drips or similar corporate actions typically fractional shares aren t available from the stock market and while they have value to investors they are also difficult to sell understanding a fractional sharefractional shares come about in a number of ways including dividend reinvestment plans stock splits mergers and acquisitions dividend reinvestment plans drip often create fractional shares a dividend reinvestment plan is a plan in which a dividend offering corporation or brokerage firm allows investors to use dividend payouts to purchase more of the same shares as this amount drips back into the purchase of more shares it is not limited to whole shares reinvesting capital gain distributions and dollar cost averaging programs can also result in purchasing fractional shares stock splits don t always result in an even number of shares a 3 for 2 stock split would create three shares for every two shares an investor owns so an investor with an odd number of shares would end up with a fractional share after the split three shares would become 4 five would become 7 and so on mergers and acquisitions m as may also create fractional shares since companies combine new common stock using a predetermined ratio the ratio often results in fractional shares for shareholders some brokerage firms will split whole shares intentionally so they can sell fractional shares to clients this division of shares is most often the case with high priced stocks like amazon amzn or alphabet google s parent company googl as of march 2020 amzn was selling for more than 1 800 per share and googl was selling for more than 1 100 per share 12 fractional shares often can be the only way individual investors can buy stock insuch companies for example a young investor with limited funds might have their heart set on buying stock in amazon starting with 1 000 to invest they won t have enough to buy a full share of stock so they might find a brokerage firm willing to sell a fractional share they could invest half of the money in one third of a share of amazon and use the other half to invest in lower priced stocks that would allow them to buy full shares in the event of stocks splits mergers and acquisitions shareholders sometimes are given the option of obtaining cash in lieu of the fractional shares the income received is taxable trading fractional sharesthe only way to sell fractional shares is through a major brokerage firm which can join them with other fractional shares until a whole share is attained if the selling stock does not have a high demand in the marketplace selling the fractional shares might take longer than hoped not everyone wants to hold onto fractional shares especially if they ended up with them for inadvertent reasons such as stock splits an investor might have 225 shares of xyz stock priced at 12 per share after a 3 for 2 stock split they would end up with 337 shares priced at 8 per share if there is a high demand for xyz stock in the market they ll be more likely to find a brokerage firm willing to take the fractional share or they could find a brokerage firm willing to sell another half share to bring their total number of shares to 338 real world example of a fractional sharein november of 2019 interactive brokers became the first of the major online brokers to offer fractional shares trading 3 on january 29 2020 fidelity announced it will offer fractional shares trading of equities and etfs 4 