what is buying a fraction of a share from a company means and how does that generates me money
In: 4
It’s just sort of a gimmick to get small investors onboard.
If you buy like 0.27 of a share, they honestly just sort of pretend to own it for you, they’ll have like 20 people owning like 25.32 ‘fractional shares’ so they’ll just buy 26 shares and its close enough, if they lose or gain a couple dollars who cares.
You generate money same as any other stock, but some stocks, like Amazon are like $2,200 a share.
So if you only have like $300, you can buy 0.14 shares or whatever and next month buy a little more, little more and accumulate it.
Makes it accessible to people.
The reality is too, formerly you could actually only buy shares 100 at a time, and people buying less were ‘odd lots’ and got worse prices.
So it’s really moved a lot to make it more reasonable for lower wealth people to get involved, but often at the cost of hidden fees or sub-optimal prices.
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