Interactive Brokers LLC (NASDAQ:IBKR) has expanded its fractional trading feature for Canadian stocks and ETFs, four years after its initial launch for US securities back in 2019.
Traders using Interactive Brokers can now trade fractional shares of all stocks and ETFs listed on the Toronto Stock Exchange and on CBOE Canada, plus eligible US and European stocks and ETFs.
They can use a cash quantity order, which allows them to place orders for a specific cash amount rather than a whole number of shares, providing them with increased access to international markets and more diverse trading opportunities. This means that if the cash amount does not correspond to a whole share, the system will automatically buy or sell the fractional portion of the share to align with the specified cash quantity. This way, clients can invest with precision, even in smaller amounts, and have the flexibility to trade fractional shares seamlessly.
The move, geared toward attracting more young clients, eliminates the barriers that many investors face when trying to invest in a diversified portfolio of listed securities. Fractional share trading allows investors to diversify their investment portfolios by spreading their relatively small capital over a broader range of stocks.
Charles Schwab was the first among US major brokers to let investors buy and sell fractions of stocks. As they looked beyond the no-fee trading war, the move set off a new rush among other brokers to do the same amid increased competition in the industry to attract the next generation of investors.
IBKR explains that the new feature comes in handy for both Lite and Pro clients who can’t afford to pay a high price tag for companies like Amazon or Google. A total of 2.26 million customer accounts were active at IBKR during May 2023, up 19 percent higher year-on-year.
“Fractional shares trading continues to be an easy and economical way for investors of any level to construct or add to their portfolios,” said Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers. “Fractional shares trading has been extremely popular for US and European stocks and ETFs, and we are excited to broaden our offering to include Canadian shares.”
Fractional shares trading is available on all Interactive Brokers’ trading platforms including IBKR GlobalTrader, a mobile trading application to trade global stocks. European stocks and ETFs listed on select exchanges, and with an average daily volume above $5 million and market cap above $5 billion, are eligible for European fractional shares trading.
