Interactive Brokers has officially launched fractional shares trading for European stocks and ETFs, a press release reported.
“Interactive Brokers was the first big broker to introduce fractional trading in U.S. shares and it’s been very popular with our clients,” EVP of marketing and product development at Interactive Brokers, Steve Sanders, said in the release. “Adding European fractional shares gives investors the opportunity to trade across markets in a more affordable way, in addition to the benefit of investing in more stocks to help clients achieve diversified portfolios.”
The launch will facilitate transactions related to units that amount to less than one full share for Interactive Brokers’s customers, allowing them to buy and sell eligible U.S. and European stocks and ETFs. The modification is intended to help clients develop a balanced portfolio regardless of the share price.
Under the terms of the launch, fractional shares can automatically be purchased or sold if the sum of cash doesn’t correlate with the total number of shares. In order to be eligible for European fractional shares, European stocks and ETFs listed on select exchanges must exceed $5 million in daily volume, with a market cap above $5 million.
“With fractional shares, there is no minimum for European shares and investors can invest in U.S. shares with as little as $1, irrespective of the stock price,” the press release states. “Investors can use fractional shares to maximize returns by putting small cash balances to work quickly, instead of holding cash and potentially earning lower returns.”
The new feature will be available across all of Interactive Brokers’ platforms, including IBKR GlobalTrader.
In addition to the transactions, the automated global electronic broker is also offering cash quantity stock orders to allow clients to enter a specific cash amount.