What to do if you can't sell fractional shares during trading hours? A complete guide to fractional share trading every small investor must know

Unable to Sell Partial Shares During Trading Hours is a common dilemma faced by many small investors, especially when holding less popular stocks. Today, we will delve into the core issues of fractional share trading, including why it can be difficult to execute trades, how to optimize trading strategies, and practical knowledge about transaction fees and timing arrangements.

What Exactly Is Fractional Share Trading? Why Is It Prone to Selling Difficulties?

Fractional shares refer to stocks less than 1000 shares (1 lot), with the minimum trading unit being 1 share. Investors hold fractional shares typically because their orders were not fully executed—possibly due to rapid stock price fluctuations, insufficient trading volume to meet their target, or residual shares from dividend reinvestment plans.

Why can’t I sell fractional shares during trading hours? The core reason lies in liquidity differences. Compared to whole shares, the trading volume of fractional shares is much lower, especially for less popular stocks. When you place a sell order during trading hours but no buyers take it up, you face the situation of being unable to sell your fractional shares during that period. This is particularly common with less mainstream stocks.

Detailed Explanation of Fractional Share Trading Hours: What Are the Differences Between During and After Market Hours?

Starting October 26, 2020, Taiwan’s trading system for fractional shares underwent a significant change, no longer limited to after-hours trading; trading during market hours also became possible. Understanding the characteristics of these two periods is crucial for solving the problem of “unable to sell fractional shares during trading hours.”

During market hours starts at 9:00 AM, where investors can only submit fractional share orders via their broker’s trading platform (electronic orders). If the order is not fully executed during the session, the unfilled portion will not automatically carry over to after-hours trading; investors need to re-submit the order.

After market hours offers more flexible order methods—both electronic and manual via broker customer service. Only one matching occurs at 14:30, and unfilled orders are automatically canceled and do not carry over to the next day.

Core Rules of Fractional Share Trading: Buy, Sell, and Receive Dividends

Fractional share trading has the following features, which directly impact your investment plans:

Fractional shares can receive dividends and shareholder benefits: Holding fractional shares entitles investors to dividends and shareholder rights, albeit in smaller amounts. The fractional part less than one share will be paid out as cash dividends or consolidated and sold for distribution.

Minimum trading unit is 1 share: Unlike whole shares traded in lots of 1000 (1 lot), fractional shares can be bought and sold in units of 1 share. The declared quantity must be 1 share or its multiples, with each order not exceeding 999 shares.

Fractional shares can indeed be sold: Taiwan Stock Exchange officially recognizes fractional share trading. As investor demand diversifies, fractional trading is becoming more common. Therefore, with sufficient liquidity, fractional shares are relatively easy to execute.

Tips and Tricks When You Can’t Sell Fractional Shares During Trading Hours

When facing the dilemma of being unable to sell fractional shares during trading hours, the following strategies can help investors improve their chances of execution:

Convert Residuals into Whole Shares: The most straightforward solution

If you hold 700 shares of Xinjin (1582.TW) and cannot sell during trading hours, you can adopt the “convert residuals into whole shares” strategy—buy an additional 300 shares to make a total of 1000 shares (1 lot), then sell through the more liquid whole share market. This method is especially suitable for less popular stocks.

Price Strategy: Buy at Limit Up, Sell at Limit Down

Since after-hours trading only involves one matching at 14:30, following the “maximize trading volume” principle:

• To buy quickly: Place a limit order at the limit-up price to increase the chance of getting filled
• To sell quickly: Place a limit order at the limit-down price to significantly boost the likelihood of execution

This aggressive pricing strategy is suitable for investors eager to offload or jump into positions and can effectively resolve the issue of being unable to sell fractional shares during trading hours.

Time-Period Orders: Reorder after hours if no execution during trading hours

If your orders during trading hours remain unfilled all day, consider re-placing orders during after-hours (13:40-14:30). During this period, manual orders via phone are easier to execute with customer support, helping to optimize prices and improve the chances of trade execution.

Complete Analysis of Transaction Fees for Fractional Shares

The transaction fee for buying and selling fractional shares is the same as for whole shares, calculated as 0.1425% of the transaction amount. However, each broker sets a “minimum fee” and offers discounts for electronic orders.

Fee Calculation Example: Buying 200 shares of TSMC (2330.TW), assuming the latest closing price is 1065 NT dollars:

• Basic fee = 200 × 1065 × 0.1425% = 303.53 NT dollars
• With a 50% discount for electronic orders from the broker = 303.53 × 50% = 151.77 NT dollars

Major Broker Fee Comparison:

Investment Tip: It is recommended that the total amount for fractional share purchases exceeds 10,000 NT dollars; otherwise, the proportion of fees can be significant and may outweigh the benefits.

How to Open an Account and Trade Fractional Shares

Opening an account is similar to trading whole shares. Simply switch to the “Fractional Share Trading” mode on your broker’s app, and the quantity input will automatically change from “lots” to “shares” (0-999). Required documents include a national ID card, a second ID (health insurance card or driver’s license), and a bank account.

The Pros and Cons of Fractional Share Investing

Advantages:

• Low Capital Barrier: No need for large funds to participate in the stock market, suitable for “testing waters” and dollar-cost averaging
• High Flexibility: Adjust purchase quantities based on personal funds
• Full Rights: Entitled to dividends and shareholder benefits

Disadvantages:

• Lower Liquidity: Longer transaction times, some stocks may be difficult to sell quickly
• Higher Transaction Cost Impact: Minimum fee limits can make small investments less cost-effective
• Trading Restrictions: Only sell orders are allowed; during trading hours, if fractional shares can’t be sold, reordering is necessary

Alternative for Small Investors: CFDs(CFD)

If concerned about liquidity issues and high fees with fractional shares, Contracts for Difference (CFD) offer an alternative. CFDs are financial derivatives that allow trading on price differences without owning the actual stock, requiring only a margin (usually 5%) to participate. Most CFDs have no additional commission, only spread costs.

Comparison Example:

• Buying 5 shares of Google (@400 USD per share) = 2000 USD
• Buying 5 Google CFDs (with 5% margin) = 100 USD

CFDs are especially suitable for short-term trading, but note that overnight positions incur interest costs, differing from long-term fractional share strategies.

Summary: Master the Rhythm, Make Fractional Share Trading Efficient

Fractional share trading has become a mainstream choice for Taiwanese investors, offering more flexibility than traditional whole share trading. The key to solving “unable to sell fractional shares during trading hours” lies in understanding trading schedules, mastering price strategies, and timely converting residuals into whole shares. At the same time, investors should carefully assess their risk tolerance, understand fee structures, and choose the most suitable trading methods. Whether opting for fractional shares or derivatives like CFDs, maintaining rationality and avoiding herd mentality are essential for long-term investment success.