Investing in stocks can feel overwhelming, especially when high share prices seem out of reach. Many traders want to buy big-name stocks but worry they can’t afford them or build a diverse portfolio with limited funds. This is where fractional shares provide an easier way to access investing for everyone.
If you use Thinkorswim, you may wonder if it supports fractional share trading. The short answer is no, Thinkorswim does not allow users to trade partial shares directly. However, this blog will guide you through what that means and look into other options for your investment goals. Keep reading to find the most suitable choices for your trading needs!
Can You Buy Fractional Shares on Thinkorswim?
Thinkorswim currently does not offer the ability to trade Thinkorswim fractional shares. Traders are required to buy entire shares when using this platform for stock investing or ETFs. This could make it less accessible for investors with smaller budgets looking to invest in higher-priced stocks.
The Thinkorswim platform is primarily oriented towards offering advanced trading tools and features. It is designed more for active investors rather than adding options such as fractional investing.
Keep reading to see how Thinkorswim compares to other brokers that support partial share trading.
How Thinkorswim Compares to Other Brokers
Thinkorswim provides sophisticated trading tools, but it does not accommodate fractional shares. Other brokers offer opportunities for partial share investing, providing greater adaptability to users.
Brokers That Offer Fractional Shares
Some brokers enable investors to trade partial shares. These services make stock investing more accessible for everyone.
- Robinhood provides fractional investing starting at just $1. Users can purchase portions of stocks or ETFs without paying commission fees.
- Fidelity offers fractional investing through its Stocks by the Slice program. Investors can buy portions of both stocks and ETFs beginning at $1.
- Charles Schwab facilitates buying fractional shares via Stock Slices. Investors can select up to 30 companies in one transaction with a minimum of $5 per company.
- Interactive Brokers offers access to fractional share ownership for US and global stocks. It allows experienced traders to diversify their portfolios efficiently.
- Public.com focuses on social stock trading and allows users to invest small amounts in portions of major companies or ETFs starting at $5.
These services make it simpler for beginners to start building diverse investments, unlike Thinkorswim’s platform, discussed next.
Key Differences Between Thinkorswim and Competitors
Thinkorswim offers advanced trading tools for experienced users but does not provide fractional shares. Below is a comparison between Thinkorswim and brokers that support fractional shares.
| Feature | Thinkorswim | Competitors (e.g., Robinhood, Fidelity) |
|---|---|---|
| Fractional Shares | Not Available | Available |
| Trading Platform | Advanced charting tools and analytics | Simpler, beginner-friendly interfaces |
| Account Minimum | No account minimum | No account minimum |
| Fees | No commissions on stock or ETF trades | Similar no-commission structures |
| Education Resources | Broad library, webinars, and courses | Basic tutorials and articles |
| Order Types | Wide variety of order types | Limited options for order customization |
| Mobile App | Feature-packed but complex | User-friendly with fewer tools |
| Support for Beginners | Geared toward experienced traders | Better suited for beginners |
| Research Tools | Extensive data and analysis | Limited compared to Thinkorswim |
Advantages of Fractional Shares
Fractional shares make investing accessible even with limited funds. They enable traders to purchase portions of costly stocks or ETFs effortlessly.
Accessibility for Small Investors
Small investors often face difficulties when purchasing high-priced stocks. Fractional shares make stock investing more approachable by allowing them to buy a portion of one share instead of a full share.
This gives people an opportunity to participate in the market with smaller budgets.
Partial shares allow beginners or those with limited funds to broaden their portfolios without requiring substantial capital. Investing in ETFs and blue-chip stocks becomes more manageable, as costs are divided into affordable portions.
Portfolio Diversification
Portfolio diversification spreads investments across different assets to manage risk. Fractional shares improve this strategy, allowing traders to invest in high-priced stocks without requiring significant capital.
For example, purchasing a portion of an expensive stock like Amazon becomes achievable with fractional investing.
Investors can combine stocks, ETFs, and other options for balanced growth potential. Owning partial shares provides access to various industries or markets at reduced costs. This practice minimizes the impact of poor performance in any single investment.
Reviewing Thinkorswim’s offerings helps traders determine if it aligns with their portfolio goals compared to brokers supporting fractional shares.
Limitations of Thinkorswim for Fractional Shares
Thinkorswim does not support fractional share purchases, which can be a disadvantage for small-scale investors. Traders may need to consider other platforms to access this feature.
Lack of Fractional Share Options
The platform does not allow for partial investing. Traders are unable to purchase portions of shares of stocks or ETFs on Thinkorswim.
This restriction may deter small investors with limited resources. Purchasing whole shares can create challenges in diversifying portfolios when stock prices are elevated. For instance, a single share of certain companies can cost hundreds or thousands of dollars, limiting access for many traders.
Alternative Features Offered by ThinkOrSwim
Thinkorswim supports advanced trading tools for both beginners and experienced traders. Users can access real-time market data, technical charts, and detailed analysis tools. The platform provides customizable charting features with over 400 technical indicators.
Active traders have access to options trading strategies and risk analysis tools designed for complex trades.
Users can simulate trades using the paperMoney feature without risking actual funds. Thinkorswim combines various asset classes like stocks, ETFs, futures, and forex into a single platform.
Investors benefit from its educational resources, including webinars and tutorials suited to different skill levels. These features make it one of the most thorough platforms for active investing beyond fractional shares.
Conclusion
Buying fractional shares on Thinkorswim is not possible right now. Other brokers may provide this option, but Thinkorswim emphasizes advanced tools and research features. Traders who want partial shares might consider other platforms.
However, Thinkorswim provides strong tools for active investors seeking thorough market insights. Each trader should choose what aligns with their goals best.
