Even if fractions always confused you in math class, you might still be interested in fractional trading.
What happened: TD is now offering fractional trading on about 2,000 stocks and ETFs in Canada and the U.S. That’s when investors can buy small portions — or fractions — of stocks that would typically be far too pricey.
Catch-up: TD is the first of Canada’s Big Six banks to offer fractional trading, which is a relatively new option for Canadian retail investors. Wealthsimple was the first platform with the option in Canada in 2021, and online brokerage Interactive Brokers began offering it last year.
- TD will have fewer stocks available for fractional trading than Wealthsimple and have fees as high as $9.99 per trade, compared to Wealthsimple’s free trades.
- However, trades will happen in real-time — a feature Wealthsimple doesn’t offer yet.
Why it matters: Retail investors account for ~45% of all trades in Canada and are now asking for the kinds of investment opportunities that were once out of reach. The introduction of fractional trading is just one part of this wave to open up access, from new platforms focused on private market funds to a push to democratize real-time market data.—QH