Does ETRADE Allow Fractional Shares? What Investors Can Buy in 2026

Yes, E*TRADE now allows customers to purchase fractional shares of select eligible stocks and exchange-traded products, including certain ETFs.

According to E*TRADE’s current fractional-shares information, eligible orders may be entered as a share quantity with up to three decimal places. The minimum value of a direct fractional order is $5.

However, several important limitations apply:

• Fractional trading is being introduced in phases.
• Not every stock or ETF is currently eligible.
• Direct purchases of OTC and non-NMS-listed securities are not supported.
• Dollar-based—or notional—orders are not yet generally available.
• Some trading, voting, corporate-action and transfer features may be restricted.
• Eligibility can change over time.

E*TRADE also supports other ways of acquiring fractional positions, including dividend reinvestment and recurring purchases of eligible ETFs through Automatic Investing.

This guide explains the differences and what investors should verify before placing an order.

What Is a Fractional Share?

A fractional share represents ownership of less than one whole share of a stock, ETF or another eligible security.

Suppose a stock trades at $400 per share. An investor who purchases 0.25 share would have approximately $100 invested before considering price movement, fees or other transaction effects.

Fractional ownership can help investors:

• Begin with less money
• Gain exposure to high-priced securities
• Divide a smaller amount among multiple investments
• Reinvest dividends more fully
• Build positions gradually

A fractional share still carries the investment risk of the underlying security. If the stock or ETF loses value, the fractional position also loses value proportionally.

Fractional ownership does not guarantee diversification, profit or protection against market losses.

Does E*TRADE Offer Fractional Shares?

Yes. As of July 2026, E*TRADE says it offers direct fractional-share purchases in eligible listed Reg NMS securities.

For an eligible security, customers may place:

• A buy order
• A buy-to-cover order
• A decimal share quantity of up to three places
• An order with a minimum notional value of $5

For example, an eligible order might be entered as:

• 0.100 share
• 0.250 share
• 0.875 share

This does not mean that every security available through E*TRADE can be purchased fractionally.

E*TRADE states that the feature is beginning with a pilot group based on S&P 100 securities and will expand through additional waves. Investors should therefore check the trade ticket for the particular stock or ETF instead of assuming it qualifies.

E*TRADE Fractional Shares at a Glance

Features and eligibility can change. Confirm current conditions directly with E*TRADE before trading.

Which Stocks and ETFs Are Eligible?

E*TRADE does not make fractional trading available for every security at the same time.

Its rollout information says fractional trading is being introduced through a pilot group of securities beginning with the S&P 100, followed by additional releases. Once fully implemented, E*TRADE expects the feature to cover most eligible Reg NMS-listed securities.

Nevertheless, E*TRADE identifies several exceptions:

• OTC securities are not supported for direct fractional purchases.
• Non-NMS-listed securities are not supported.
• Berkshire Hathaway Class A shares are excluded.
• Morgan Stanley common and preferred shares are excluded.
• Other securities may be restricted.
• Eligibility can change at any time.

The practical way to check eligibility is to open the security’s trade ticket in your E*TRADE account. If fractional trading is enabled, the ticket should allow a decimal share quantity.

Do not rely solely on an old third-party list. A security that was ineligible during an earlier rollout phase may later become available, while an eligible security could also be restricted.

How to Buy Fractional Shares on E*TRADE

The current general process is straightforward.

1. Sign in to an eligible E*TRADE account

Open the trading platform or mobile application and navigate to the order ticket.

Account eligibility, platform availability and functionality may differ. Contact E*TRADE if the feature does not appear.

2. Search for the stock or ETF

Enter the ticker symbol of the security you want to examine.

Before placing an order, review:

• What the company or fund does
• Its risks
• Current market price
• Fees and expenses
• Liquidity
• Portfolio concentration
• Tax considerations
• Whether it fits your investment objective

Fractional availability is not an investment recommendation.

3. Confirm that the security is eligible

The trade ticket should indicate whether a fractional quantity can be entered.

If only whole-share quantities are accepted, the security or account may not currently qualify.

4. Enter the fractional quantity

E*TRADE says eligible fractional orders may contain a decimal quantity of up to three places.

For instance, you might enter 0.250 share rather than one full share.

Although the order is expressed as a share quantity, it must satisfy the $5 minimum value.

5. Review the estimated order value

Check the estimated cost carefully. A security’s price can change before execution, so the final value may differ from the initial estimate.

6. Preview and submit the order

Review all details before submitting:

• Ticker symbol
• Action
• Quantity
• Estimated value
• Order type
• Account
• Applicable disclosures

Do not approve an order merely because the required investment is small. The possibility of loss remains.

Can You Buy Fractional Shares by Dollar Amount?

Not yet through E*TRADE’s general direct fractional-order feature.

E*TRADE currently states that notional dollar-based orders are coming in the future. For now, direct fractional orders are entered as a decimal share quantity, subject to a minimum order value of $5.

That distinction matters.

Suppose you want to invest exactly $100 in a stock. A true dollar-based order would allow you to enter $100, and the platform would calculate the fractional quantity.

Under a quantity-based process, you instead enter a fraction such as 0.200 share. Its dollar value depends on the security’s price.

The estimated value may not equal your desired allocation exactly.

E*TRADE Automatic Investing vs. Direct Fractional Trading

E*TRADE’s Automatic Investing program is separate from its direct fractional trading feature.

According to E*TRADE’s Automatic Investing guide, customers can schedule recurring investments in eligible ETFs or mutual funds starting at $25.

The major differences are:

Automatic Investing may be helpful for investors who want to contribute on a schedule, but it does not guarantee a profit or protect against losses.

Regular purchases can also lead to multiple tax lots. Investors should maintain appropriate records and understand potential tax consequences in a taxable account.

Can E*TRADE DRIP Create Fractional Shares?

Yes. E*TRADE’s Dividend Reinvestment Program may use an eligible dividend to purchase additional shares of the same stock or ETF, including a fractional share when the payment is insufficient for a full share.

For example, suppose you receive a hypothetical $20 dividend while the investment trades at $200 per share. Reinvesting the entire amount could produce approximately 0.10 additional share, subject to the program’s execution and rounding procedures.

DRIP differs from making a new fractional-share order:

• The purchase is funded by an eligible dividend.
• Reinvestment occurs automatically after enrollment.
• The resulting quantity depends on the dividend and execution price.
• Only eligible securities and dividends qualify.

Reinvested dividends can still be taxable in a regular brokerage account. Consult a qualified tax professional regarding your circumstances.

Our guide explaining how ETF dividend payments work provides more detail about distributions, ex-dividend dates and proportional payments.

Do E*TRADE Fractional Shares Pay Dividends?

A fractional position in an eligible dividend-paying stock or ETF can generally receive a proportional dividend.

For example, if one full share qualifies for a $2 distribution:

• 0.50 share might receive approximately $1.
• 0.25 share might receive approximately $0.50.
• 0.10 share might receive approximately $0.20.

Actual processing can be affected by rounding, account arrangements and other brokerage procedures.

A dividend is never guaranteed merely because a company or ETF has paid one previously. Companies and funds can increase, reduce, suspend or eliminate distributions.

Can You Buy Fractional Shares of VOO on E*TRADE?

VOO is an ETF, but you should confirm its current eligibility directly through the E*TRADE trade ticket.

Fractional-share availability is being expanded in phases, and E*TRADE says security eligibility can change. Therefore, the presence of an ETF on the standard platform does not automatically establish that it is available for every type of fractional order.

If VOO is eligible in your account, you may be able to enter a qualifying decimal share quantity. It may also be available through Automatic Investing, depending on the current eligible-investment list.

Review our separate guide to buying fractional shares of VOO for broader brokerage considerations and limitations.

Can You Sell E*TRADE Fractional Shares?

Fractional positions generally need an available and supported method of liquidation. However, E*TRADE warns that security eligibility can change.

In rare situations, you could own a fractional position in a security that later becomes unavailable for a standard fractional sale. If that occurs, additional procedures or assistance may be necessary.

Before purchasing, review:

• How fractional sell orders are submitted
• Whether only particular order types are accepted
• Trading-hour limitations
• What happens if eligibility changes
• How account closure affects the fraction

Contact E*TRADE for instructions if the platform does not allow an expected transaction.

Can Fractional Shares Be Transferred From E*TRADE?

Fractional shares may not transfer in kind to another brokerage.

E*TRADE’s Automatic Investing agreement says fractional ETF interests may be liquidated when the associated holdings are transferred to another investment firm. More generally, the receiving brokerage may not accept the fractional position.

This can result in:

• Sale of the fractional portion
• Cash being transferred instead
• A potential taxable gain or loss
• The transfer of whole shares only
• Temporary market exposure differences

Check the policies of both brokerages before initiating a transfer. Do not assume that acceptance of whole shares means the receiving firm will also accept fractions.

Do Fractional Shares Have Voting Rights?

E*TRADE says holders may generally be able to vote fractional interests proportionally. However, voting and corporate-action rights can differ from those associated with whole shares.

Fractional positions may not be eligible for certain voluntary corporate actions, such as:

• Tender offers
• Some rights offerings
• Other elections requiring whole shares

Mandatory events—including certain splits, mergers and spin-offs—may be processed proportionally, subject to the brokerage’s procedures.

Review the applicable disclosures when voting or participating in a corporate event is important to you.

Advantages of E*TRADE Fractional Shares

Lower entry amount

The $5 minimum for an eligible direct fractional order can allow someone to begin without purchasing a full share.

Access to higher-priced securities

An investor can obtain limited exposure to an eligible security without paying its entire share price.

More precise allocation

Fractions can make it easier to divide a portfolio among several investments, although merely owning multiple securities does not ensure effective diversification.

Gradual investing

Investors can build a position over time instead of waiting until they can afford a whole share.

Dividend reinvestment

DRIP can reinvest more of an eligible distribution instead of leaving cash uninvested.

Recurring ETF investing

Automatic Investing provides a separate way to schedule contributions to eligible ETFs and mutual funds.

If you are beginning with a limited amount, review how to start investing with little money before choosing individual securities.

Limitations and Risks

Limited rollout

Not every stock or ETF currently qualifies, and availability may change.

No general notional orders yet

Direct trades are entered using a fractional share quantity rather than an exact dollar amount.

Transfer restrictions

Fractional positions may need to be sold before moving an account to another brokerage.

Corporate-action limitations

Some voluntary events may be unavailable to fractional holders.

Possible voting differences

Voting procedures for fractions can differ from those for whole shares.

Recordkeeping

Repeated small investments can create numerous tax lots, complicating cost-basis records.

Concentration risk

The ability to buy a small fraction of an expensive stock does not make that stock diversified.

Market risk

Fractional shares rise and fall with the underlying security. Smaller position size limits the dollars invested but does not change the investment’s percentage loss.

Before choosing investments, consider your personal investment risk tolerance and financial capacity for losses.

E*TRADE Fractional Shares vs. Other Brokers

Several brokerages provide some form of fractional investing, but the details can differ substantially.

Compare:

• Eligible stocks and ETFs
• Minimum order amount
• Share-based versus dollar-based orders
• Recurring-investment availability
• Trading windows
• Order types
• DRIP support
• Transfer treatment
• Voting rights
• Account eligibility
• Fees and execution practices

Do not select a broker solely because it advertises fractional shares. Consider the complete account, including customer service, platform reliability, investment selection, cash management, research tools and applicable fees.

Features change frequently, so comparisons should be verified directly with each brokerage.

Frequently Asked Questions

Does E*TRADE allow fractional shares?

Yes. E*TRADE now allows direct fractional purchases of select eligible stocks and exchange-traded products. Availability is being expanded in phases.

What is the E*TRADE fractional-share minimum?

E*TRADE states that an eligible direct fractional order must have a minimum value of $5.

Can I invest exactly $10 in a stock on E*TRADE?

Not necessarily through the general direct-order feature. E*TRADE currently requires a fractional share quantity, while notional dollar-based orders are described as coming in the future.

How many decimal places does E*TRADE support?

E*TRADE says eligible direct fractional orders can contain a share quantity of up to three decimal places.

Can I buy fractional ETFs on E*TRADE?

Select eligible ETFs may be available for direct fractional purchases. E*TRADE also offers Automatic Investing in eligible ETFs starting at $25.

Can I buy fractional shares of every stock?

No. Availability is limited to eligible securities and is being expanded through multiple rollout phases.

Does E*TRADE support fractional shares of OTC stocks?

No. E*TRADE currently says direct fractional purchases of OTC and other non-NMS-listed securities are unavailable.

Can E*TRADE reinvest dividends into fractional shares?

Yes. Its DRIP may use an eligible dividend to purchase additional whole or fractional shares of the same investment.

Can E*TRADE fractional shares be transferred?

Not always. A fractional portion may need to be liquidated before an account transfer, especially if the receiving brokerage cannot accept it.

Are E*TRADE fractional shares commission-free?

E*TRADE generally advertises $0 online commissions for U.S.-listed stocks and ETFs, but exclusions, regulatory charges, fund expenses and other fees may apply. Review the current pricing schedule before trading.

Can fractional shares lose value?

Yes. A fractional share has the same proportional exposure to the underlying investment’s market movements and can lose value.

The Bottom Line

E*TRADE now offers direct fractional-share purchases for select eligible stocks and ETFs. Qualifying orders can use a decimal quantity of up to three places and must have a minimum value of $5.

The program remains subject to a phased rollout. Not every security is eligible, direct OTC fractional purchases are unavailable, and general dollar-based orders have not yet been introduced.

Investors can also acquire fractional positions through dividend reinvestment and use Automatic Investing for recurring purchases of eligible ETFs starting at $25.

Before placing an order, confirm eligibility on the E*TRADE trade ticket and review transferability, voting, corporate-action, tax and trading limitations. Most importantly, evaluate the underlying investment itself. Fractional ownership makes position sizing easier, but it does not make an unsuitable or risky investment appropriate.

Information checked July 18, 2026. Brokerage features can change after publication. This article is for educational purposes only and does not constitute investment, financial, tax or legal advice. All investments involve risk, including possible loss of principal. WealthLedger is not affiliated with or endorsed by ETRADE or Morgan Stanley.*