XTB brings fractional trading to Middle East with €100k monthly cap
XTB MENA, the Middle East business of Warsaw-based X Trade Brokers, has updated its trading offering to provide its clients with the opportunity to trade fractions of stocks.
The multi-regulated broker is rolling out a fractional trading feature as a way to lower the bar for young investors. The feature allows small-bucks traders to diversify their portfolios by spreading their relatively small capital over a broader range of stocks.
The move, geared toward attracting more young clients, eliminates the barriers that many investors face as the brokerage split whole shares intentionally, so they can sell fractional shares.
With fractional shares, XTB’ clients can buy a “slice” of stock that represents a partial share. For example, they can buy 1.5 or 1.05 of an Amazon share, or any other company available on the platform. Meanwhile, the minimum transaction value remains the same – €10. Moreover, XTB doesn’t impose fees on fractional share transactions, as long as they remain below a monthly threshold of €100,000.
This new product offers an affordable gateway to invest in blue-chip shares and enables XTB’s investors to build portfolios of shares or ETFs listed on regulated markets with low costs. The fractional trading feature eliminates the barriers that many investors face when trying to invest in a diversified portfolio of high-value securities.
“With fractional shares, we are removing the barriers that have prevented many of our clients in the Middle East from participating in the stock market. We are committed to fostering an equity culture where retail investors, regardless of their portfolio size, can participate in companies they believe have significant potential,” said Achraf Drid, CEO of XTB Middle East and North Africa.
The trend picked up as retail brokers look beyond the no-fee trading war, which set off a new rush among other firms to do the same amid increased competition in the industry to attract the next generation of investors.
Meanwhile, XTB highlighted how its offering is more appealing to a wider audience since it executes all fractional trades in real-time during market hours. This goes against other firms’ products that execute similar trades at the end of a trading day or wait for multiple orders to add up to full shares rather than holding the remaining shares on their balance sheet. That, however, means more market risk and exposure to volatility.
Additionally, XTB’s fractional shares grant users genuine ownership of shares, differing from synthetic products. This ownership entitles investors to proportional dividend payments on the fractional shares they possess.