TD Ameritrade is one of the largest brokerage firms in the United States, offering a wide range of investment products and services. In 2023, they introduced the ability to sell fractional shares, which is a game-changer for investors who want to diversify their portfolio without having to buy whole shares.
What are Fractional Shares?
Fractional shares are a portion of a single share of stock. For example, if a share of Apple stock costs $500, but you only have $100 to invest, you can buy a fractional share worth $100. This means you own a portion of that share, and your investment will increase or decrease in value based on the performance of the stock.
How to Sell Fractional Shares on TD Ameritrade
Selling fractional shares on TD Ameritrade is easy. First, log in to your account and navigate to the “Trade” tab. From there, select the account you want to sell from and choose the stock you want to sell. If you have fractional shares available, you will see the option to sell them.
Benefits of Selling Fractional Shares
Selling fractional shares has several benefits. First, it allows investors to diversify their portfolio with small amounts of money. Instead of having to buy whole shares, investors can purchase a portion of a share, which can help reduce risk and increase returns. Second, selling fractional shares also allows investors to take advantage of market fluctuations. If a stock price drops, investors can buy more fractional shares at a lower price, which can help them make a profit when the stock price recovers.
Considerations When Selling Fractional Shares
While selling fractional shares can be a great way to diversify your portfolio, there are some considerations to keep in mind. First, not all stocks are available for fractional purchases, which can limit your investment options. Second, selling fractional shares may result in higher transaction fees compared to buying whole shares. This is because brokerage firms may charge a fee for each fractional share sold.
TD Ameritrade’s introduction of the ability to sell fractional shares is a game-changer for investors who want to diversify their portfolio without having to buy whole shares. By selling fractional shares, investors can take advantage of market fluctuations, reduce risk, and increase returns. While there are some considerations to keep in mind, selling fractional shares can be a great way to invest in the stock market with small amounts of money.