Charles Schwab plans to introduce Schwab Stock Slices

Maria Nikolova

The new service enables investors to own shares in any company from the S&P 500 for as little as $5 each, even if their shares cost more.

Charles Schwab today announced plans to introduce Schwab Stock Slices™, a new service which aims to simplify and democratize investing.

Schwab Stock Slices will enable investors to own shares in any of the companies from the S&P 500 for as little as $5 each, even if their shares cost more. Using the new service, which is set to launch to clients on June 9, investors can purchase a single stock slice or up to 10 different Stock Slices at once, commission-free.

Schwab Stock Slices will give investors the ability to sort and search companies by ticker, company name and sector. The service will also give investors the opportunity to create and purchase their own bundles of stocks based on their needs and interests. All Schwab clients also have access to a range of educational resources and research including stock screeners and Schwab Equity Ratings®, the firm’s proprietary method for rating stock performance.

Once someone selects the single stock or collection of stocks they want to purchase, the total dollar amount invested is split evenly across each stock, and slices of shares can round as narrowly as four decimal places. For example, a $50 investment across five stocks would appear as a $10 purchase of each stock, and the order would show the number of shares or fraction of shares that $10 would buy based on stock prices at the time of execution.

Schwab Stock Slices will give investors the power to build a portfolio of stocks for a small fraction of what the total price would be otherwise.

Once a trade order is executed via Schwab Stock Slices, each stock fraction will appear in a client’s brokerage account to be held or sold individually going forward. Investors will also be able to choose to automatically reinvest cash dividends into the purchase of additional shares (or fractional shares) of those stocks.

Schwab Stock Slices will be available in retail Schwab brokerage, custodial, and individual retirement accounts (IRAs), and clients using the service will be able to trade shares in real-time throughout the trading day using market orders.

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