A Must-Read for Small Investors | How to Sell Partial Shares More Effectively? Complete Analysis of Trading Hours and Fees

Many small investors want to invest in popular stocks but are limited by funds. Fractional share trading has become an ideal choice. However, beginners often face an awkward problem: How to sell fractional shares more easily? Buying is easy, but selling often gets stuck. This article整理s a complete guide to fractional share trading to help you master the secrets of selling.

Why is it hard to sell fractional shares? Understand these basic concepts first

Fractional shares refer to stocks less than 1,000 shares (1 lot), with a minimum trading unit of 1 share. They usually arise from incomplete buy/sell orders or during stock rights offerings. Fractional share trading means trading specifically in fractional shares, with each order not exceeding 999 shares.

Seemingly convenient, fractional share trading hides a trap: hard to sell. The key reason is poor liquidity—less traded volume for less popular stocks. To sell smoothly, you often need to wait for the right buyer. Sometimes, orders placed during trading hours remain unfilled, requiring re-placing orders after hours, or even extending to the next day.

Complete analysis of trading hours for fractional shares｜How to choose between intraday vs after-hours trading?

Since October 26, 2020, Taiwan Stock Exchange has implemented intraday fractional share trading, so investors are no longer limited to after-hours trading. Understanding trading sessions is the key to how to sell fractional shares more easily.

Intraday fractional trading hours: 09:00-13:30

• Order method: Electronic orders (via broker app)
• Matching: First match at 9:10, then continuous auction every minute
• Execution priority: Price priority, then time of order submission at the same price

After-hours fractional trading hours: 13:40-14:30

• Order method: Electronic or phone/manual orders
• Matching: Single auction at 14:30
• Execution priority: Price priority, then random order at the same price

A common mistake for beginners is thinking that unfilled orders during trading hours will automatically carry over to after-hours—this is wrong. Unfilled intraday orders must be re-placed after hours; otherwise, they are canceled. Similarly, after-hours orders not filled by 14:30 will be automatically canceled and won’t carry over to the next trading day.

How to sell fractional shares more easily? 3 practical tips

Tip 1: Convert fractional to whole shares, leveraging better liquidity of whole shares

If you hold non-hot stocks (e.g., 700 shares of an obscure stock), there may be no buyers during trading hours. In this case, you can adopt the “convert fractional to whole” strategy: first buy 300 shares at intraday prices to reach a full lot of 1,000 shares, then sell the entire lot via whole share trading (which has far better liquidity).

This method has a prerequisite: the cost of buying should not be too high, or the additional purchase costs will eat into your subsequent selling profits. Usually, when the market shows large sell orders unfilled, this trick is worth trying.

Tip 2: Master the “maximum trading volume” principle during after-hours auction

At 14:30, only one auction occurs. Follow the “maximize trading volume” principle. Smart approaches include:

• If in a hurry to sell? Place a sell order at the limit down price. The lower price attracts buyers, increasing the chance of successful sale under the maximum trading volume rule.
• Not in a rush? Place a market order or a reasonable price close to the closing price, waiting for suitable buyers.

Tip 3: Use multiple intraday matching opportunities to increase chances

Intraday trading matches orders every minute, offering more chances than the single after-hours auction. Strategy:

• Place your order within half an hour before the first match at 9:10. Priority in submission time helps you get ahead.
• If not filled, don’t rush to change the price; each minute offers a new matching opportunity.

Fees are critical to successful selling｜Details determine profit

The commission for fractional shares is the same as for whole shares, at 0.1425% of the transaction amount. For example, selling 200 TSMC shares (closing price NT$1,065):

200 shares × NT$1,065 × 0.1425% = NT$303.53

However, different brokers offer significant discounts. Here’s a comparison of five major brokers’ fractional share trading discounts:

Using Fubon Securities (with an 18% discount), the NT$303.53 fee becomes NT$54.64.

At first glance, it seems cheaper, but beware of a hidden cost: minimum fee of NT$1. For very small transactions (e.g., selling 10 shares), the calculated fee might be less than NT$1, but you still pay NT$1, which is inefficient for tiny trades.

Smart small investors’ decision tree for selling fractional shares

Before deciding to sell, ask yourself:

Q1: Is it a hot stock?

• Yes → Place a market or reasonable price order for quick execution
• No → Proceed to Q2

Q2: Do you want to sell immediately?

• Yes → Use “convert fractional to whole” or place a limit at the limit down price
• No → Proceed to Q3

Q3: Is your total holding worth at least NT$5,000?

• Yes → You can sell, as transaction costs are more reasonable
• No → Hold or add more to reach a larger amount

Q4: Is there a clear sell signal?

• Yes → Prioritize selling to avoid market downturn
• No → Continue holding or review periodically

Pros and cons of fractional share trading for small investors

Advantages:

• Low investment threshold; even 1 share
• Allows small investors with limited funds to invest in popular stocks like TSMC or MediaTek
• Suitable for dollar-cost averaging and maintaining liquidity

Disadvantages:

• Poor liquidity leads to longer transaction times
• Minimum fee can be high relative to small amounts
• Only sell orders are available; cannot place buy orders for fractional shares
• Must sell the entire fractional position at once

Are there alternatives besides fractional shares?

If concerned about liquidity and fees, consider Contracts for Difference (CFD). CFDs do not require actual stock ownership; they trade price differences, often with no commission, only spread costs. However, CFDs settle daily, making them more suitable for short-term trading. Holding overnight incurs interest costs.

Both have pros and cons: fractional shares suit long-term value investing, CFDs are better for short-term swings. Small investors should choose based on their investment style.

Summary

The core of how to sell fractional shares more easily involves three points: choosing the right timing (intraday multiple matches are better than a single after-hours auction), setting the right price (market or reasonable for hot stocks, limit down for cold stocks), and understanding trading rules (convert fractional to whole, maximize trading volume).

Compared to the ease of buying fractional shares, selling requires more strategy and patience. Beginners often feel anxious due to poor liquidity, but once understanding the mechanisms and applying proper techniques, selling fractional shares is achievable. The most important thing is to plan your exit before buying, select more liquid hot stocks, and develop good trading habits.