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Buying partial stocks through Robinhood
Posted on 7/13/20 at 3:08 pm
Posted on 7/13/20 at 3:08 pm
Robinhood just launched the ability to buy partial stocks recently. It makes it easier seemingly to get into shares like amazon or google without needing to invest too much cash up front. Is there a downside or catch to it?
2
Posted on 7/13/20 at 3:14 pm to jlovel7
it's just math, man.
AMZN closed at 3100 today.
if you buy 0.25 shares, it will cost you $775
if AMZN goes up 5% tomorrow, your 0.25 shares will be worth $813, for a one day profit of $38
there is no catch or downside, its no different than buying a full share of another company trading at $775. the potential issue could be liquidity, ie: no market for your fractional shares when you want to sell, but that seems unlikely with AMZN or similar
AMZN closed at 3100 today.
if you buy 0.25 shares, it will cost you $775
if AMZN goes up 5% tomorrow, your 0.25 shares will be worth $813, for a one day profit of $38
there is no catch or downside, its no different than buying a full share of another company trading at $775. the potential issue could be liquidity, ie: no market for your fractional shares when you want to sell, but that seems unlikely with AMZN or similar
Posted on 7/13/20 at 5:31 pm to jlovel7
Schwab... which is a better company / site, does the same. I think Fidelity announced the same, but not sure if it is up and running.
The only downside I know is that you may have to do a market order - no limit order. At some quality firms, that may not make a difference to many. But, I know one major bank who will screw you every time on a market order.
The only downside I know is that you may have to do a market order - no limit order. At some quality firms, that may not make a difference to many. But, I know one major bank who will screw you every time on a market order.
This post was edited on 7/13/20 at 5:33 pm
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