Fidelity opens up to partial stock trades as competition from online platforms heats up

Boston-based Fidelity Investments Inc. has today announced (via CNBC) that it’s opening its brokerage doors to partial stock trades, following in the footsteps of similar moves from modern online trading platforms and stock brokerage firms.

Purchase any company at any price

With the new partial stock trades offering, Fidelity Investments customers will be able to purchase any company they wish — regardless of its price. Up to now, most traditional brokerages only allowed investors to purchase stock in whole increments. With this change, you can buy $10 in Apple despite the fact that shares are currently trading at $324.

“Customers can now own a piece of their favorite companies and ETFs based on how much they want to invest, independent of the share price,” Scott Ignall, head of Fidelity’s brokerage platform, said in the company’s press release today.

Partial stock trades are just the latest trend that online platforms like Robinhood have used to attract young investors. The company told CNBC in December that it had more than 200,000 people already in line to get fractional shares trading just a few hours after its announcement. In fact, there are currently over 1.2 million people on the wait list for Robinhood’s offering.

Fidelity’s partial stock trades are real-time

Fidelity is trying to stand out, however, noting that fractional trades, which are available to customers today, will be carried out in real time:

“Fidelity will execute all fractional trades in real-time during market hours, meaning customers will always know the share price, unlike some firms that execute fractional trades at the end of a trading day or wait for multiple orders to add up to full shares,” Fidelity wrote in its press release.

Other big brokers like Charles Schwab have also announced plans to get into fractional trades at some point in 2020.

Robinhood encroaches

It’s yet to be seen if these moves will help stem Robinhood‘s encroachment on the client base of its larger competitors. Robinhood also led the way with another disruptive move, zero commission trades, which is putting a squeeze on the larger firms’ profits. Over the course of 2019, all major brokers moved to offer the same.