Interactive Brokers mobile app enables fractional share trading - FinanceFeeds

Interactive Brokers mobile app enables fractional share trading

Maria Nikolova

Fractional share trading with the ability to enter order size in terms of dollar amounts is in gradual rollout.

Online trading major Interactive Brokers has enhanced the trading capabilities of the IBKR Mobile app for Android-based and iOS-based gadgets. The latest improvements will be of use to traders who would like to buy a certain amount worth of an expensive stock, or looking to diversify among more investments.

The latest version of the app enables fractional share trading and gives traders the ability to enter order size in terms of dollar amounts.

When using a Cash Quantity order, users specify the dollar amount they want to buy or sell instead of specifying the number of shares. Rather than buying five shares they elect to buy, for example, $500 worth of a stock. Then they purchase the equivalent number of shares for that value rounded down to the nearest whole share.

If traders enable their account to Trade in Fractions, the brokerage will buy or sell a fraction of a share to use the full amount of cash the traders specified and get the greatest possible number of shares for their money. If traders want to spend $500 but one share of the stock they want to buy is currently $1000, they would end up with 0.5 shares.

The ability to trade in fractions also makes it easy for traders to diversify their portfolios; if they have $500 to spend they can purchase fractional amounts in multiple companies when they otherwise might only be able to purchase whole shares in two or three companies.

To use cash quantity for an order, tap the arrow at the end of the Quantity field to display the Size Ladder, where you typically specify the number of shares for the order. Tap Cash from the toggle at the bottom and specify the cash amount you want to use. When the order fills, it will fill as closely as possible to your specified amount, rounding down to the nearest whole share if you haven’t enabled trading in fractions.

Because the price may move before the order fills, IBKR applies a “Cash Quantity Estimate Factor” when calculating the order quantity. This factor, set to 25% by default, increases the calculated order quantity to try to achieve the desired monetary outcome in cases where the price drops (for a buy) or rises (for a sell) by allowing more units to be bought or sold. You can change the default percentage in the Size section of the Stock presets in Configuration.

To enable fractional share trading, log into Client Portal and from the Settings menu select Account Settings. Click the gear icon next to Trading Experience & Permissions and expand the Stocks section. Check United States (Trade in Fractions).

This feature is available to both IBKR Pro and IBKR Lite clients, and supported for a subset of US stocks.

The company notes that this version of the app is being rolled out to clients gradually.

In the preceding version of the solution, rolled out in October, the brokerage introduced commission-free trading of US exchange-listed stocks and ETFs – with no account minimums and no minimum activity fees – through its IBKR Lite trading plan. Designed for the less active trader, IBKR Lite offers a simplified trading experience with free, non-consolidated market data for US stocks with CBOE ONE and low cost access to the global markets.

Read this next

Industry News

John McAfee indicted on crypto fraud charges

This is only the first case brought by the CFTC for a manipulative scheme involving digital assets

Industry News

ASIC announces regulatory costs ahead of CFD trading restrictions

The Australian regulator “is acutely aware of the challenges facing many businesses due to COVID-19”, but made no reference to the challenges FX and CFD brokers will face amid the leverage restrictions.

Industry News

Top lawyers say 2021 will be record year for AML penalties

Federal regulators have imposed more than $200 million in penalties on corporations, just in the last two months.

Industry News

Swedish crypto conman pleads guilty to $16 million scam

Karlsson was extradited from Thailand and is facing a maximum sentence of 20 years for the wire fraud and securities fraud charges and another 20 years for the money laundering charge.

Industry News

ESG premium on corporate bonds of +5bps in Europe

The top issuers of ESG bonds and loans in 2020 were France, Germany, and Luxembourg, compared to France, the UK, and Spain in 2019.

Technology

Finastra gains access to NICE Actimize AML and fraud solution

The AI-powered platform provides AML and fraud solutions, with real-time behavioral analytics and machine learning capabilities.

Industry News

A new dawn in stock trading is here. Your brokerage should embrace it!

London looks set to capitalize on the latest global equities trend of Spacs – This could well be the new trend for electronic trading firms. We investigate how.

Industry News

SEC launches Climate and ESG Task Force

The task force will develop initiatives to identify ESG-related misconduct and use data analysis to mine and assess information across registrants, to identify potential violations.

Industry News

Mobile trading takes center stage: Is your brokerage doing what it takes?

Mobile trading has grown in popularity in recent years to the point it became indispensable for the trading industry. The lifestyle changes and mass retail adoption amid the COVID-19 pandemic made sure there is no going back.