What Are the Minimum Shares You Can Buy?
Author: James Clark
Do you want to know the minimum amount of shares you can buy? We share the minimum shares you can buy in the stock market right here.
Most people assume that the minimum number of shares that an investor can buy is one, but the answer isn’t as straightforward. The answer to the question “what is the minimum shares you can buy?” is complicated because there are fractional shares in the market. These fractional shares are shares of equity, which are fewer than one share and generally caused by a dividend reinvestment plan (DRIP) or a stock split.
The minimum shares that any investor can purchase from the stock market is one. Still, when using roboadvisors and dividend reinvestment plans, investors can access percentages of whole shares. Investment firms and brokerages tend to fractionalize shares for investors who can’t buy large shares, such as Amazon or Berkshire Hathaway, which equals thousands of dollars per share.
Using Trading Practices to Invest in Shares
Even though there isn’t a minimum limit on purchasing the stock of publicly traded companies, it’s recommended to buy stocks in blocks with a minimum value between $600 to $1,000. That ensures when investors purchase stocks, there will be commissions and brokerage fees when the trade takes place.
Before deciding to purchase stocks on the stock market, investors should research the different types of securities offered to them. After identifying the stocks they want to buy, they need to execute their online trade through their brokerage account. You can make two types of trades, which are a limit order and a market order.
When investors choose to trade through a market order, they will buy the stock at the price it is trading at in the market currently. When investors choose a limit order, they will have to wait until the stock price falls to a particular limit before buying the stock.
How to Buy Fractional Shares?
You can buy less than one share of a stock, which would be through a fractional share. In general, fractional shares are commonly found in a DRIP plan, which will be when a company or brokerage firm lets investors use dividend payouts to buy more shares. That means you’re not restricted from purchasing the minimum of a share, and the brokerage or corporation will keep a record of the ownership percentages involved in the trade.
The best part about DRIPs is that they don’t have any brokerage or commission fees attached to them, which means investors can increase their holdings cheaply and don’t have to pay extra fees when using their dividend payouts.
1. Arc Best Corporation (ARCB)
2. USA Truck, Inc. (USAK)
3. Dow, Inc. (DOW)
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