Must-Read for Small Investors | Tips for Selling Fractional Shares: Trading Hours, Fees, and Execution Strategies All in One

Small-cap investing’s biggest pain point isn’t buying in, but how to sell fractional shares smoothly to ensure successful transactions. Many people discover after purchasing fractional shares that liquidity is poor and it’s hard to unload them. Today, from the perspective of selling, we’ll organize comprehensive knowledge about fractional share trading for you.

The Core Challenges of Selling Fractional Shares

Fractional share trading lowers the investment threshold, but when selling, liquidity issues often arise. Especially with less popular stocks, they might not sell during the trading day. Why is this? Because trading volume for fractional shares is much lower than for whole shares, requiring more time for matching, and investors may not be able to complete transactions at the moment of order placement.

If your fractional share order isn’t filled during trading hours or is only partially filled, the system won’t automatically carry it over to after-hours trading. You must resubmit the order. That’s why understanding fractional share trading rules and selling techniques is so important.

The Best Trading Time to Sell Fractional Shares

Taiwan’s fractional share trading is divided into two sessions, each with different rules:

During Market Hours (9:00-13:30)

• Orders can only be submitted electronically (broker app or web platform)
• First matching occurs at 9:10, followed by a call auction every 1 minute
• Transaction priority: “Price priority, then submission time at the same price”
• If not filled, orders are not automatically retained; you need to resubmit

After-Hours Trading (13:40-14:30)

• Orders can be placed electronically or via phone
• A single call auction occurs at 14:30
• Priority: “Price priority, then random order at the same price”
• Unfilled orders are automatically canceled and are not carried over to the next day

Recommended strategy for choosing a selling session: If you hold popular stocks, multiple matches during market hours increase the chance of successful sale. For less popular stocks, there may be no counterpart during the day, so consider waiting for the after-hours call auction or switching to the after-hours session directly.

How Are Transaction Fees for Selling Fractional Shares Calculated?

The transaction fee for selling fractional shares is the same as for whole shares, at 0.1425% of the transaction amount. However, brokers set minimum fee thresholds, usually starting at 1 yuan, and often offer discounts for electronic orders.

Example Calculation

Suppose you sell 200 shares of TSMC (closing price 1065 yuan):

• Transaction amount: 200 × 1065 = 213,000 yuan
• Basic fee: 213,000 × 0.1425% = 303.53 yuan
• With a 50% discount: 303.53 × 50% = 151.77 yuan

Comparison of Major Brokers’ Fees

Key to Lower Fees: The larger the single transaction amount, the lower the fee percentage. It’s recommended to trade at least over 10,000 yuan per transaction to avoid high fee proportions eating into profits.

Practical Tips for Selling Fractional Shares

Break down large lots — the most effective selling strategy

When you hold fractional shares that can’t be sold smoothly during the day, you can adopt the “convert fractional to whole” approach to accelerate sales.

Specific Method:

Suppose you want to sell 700 shares of Shin Kong (1582.TW), but this stock has low liquidity and is hard to sell during the day. You can:

1. First buy 300 shares to make a full 1000-share lot (one standard lot)
2. Sell this lot on the more liquid whole-share market
3. This not only increases the chance of sale but also allows you to get a better price

This trick leverages the high liquidity of the whole-share market to solve the problem of selling fractional shares.

Buy at the limit up price, sell at the limit down price

Since after-hours trading only has one matching opportunity at 14:30, if you want to ensure selling fractional shares, you can place a sell order at the limit down price. According to the “maximum transaction principle,” the limit down price will be prioritized for matching, maximizing the chance of a successful sale.

Conversely, if you urgently want to buy fractional shares, you can place an order at the limit up price, which can also improve the likelihood of execution.

Pros and Cons of Trading Fractional Shares

Advantages

• Low Capital Barrier: No need to buy a full lot (1000 shares), can start with just 1 share, around 1000 yuan
• Friendly for Regular Investment: Suitable for small investors to diversify, maintaining sufficient liquidity
• Low Cost to Test Waters: No large investment needed to explore new stocks

Disadvantages

• Poor Liquidity: Trading volume is much lower than whole shares, leading to longer waiting times
• Higher Fees: Minimum fee limits make small trades relatively expensive
• Selling Limitations: Only sell orders are available; cannot place buy orders; converting fractional to whole shares has time limits

Summary: How to Become a Master at Selling Fractional Shares

Trading fractional shares is a double-edged sword for small investors. Buying is easy, but selling is the real test. To successfully unload fractional shares, remember these three points:

1. Choose the right timing: Use market hours for popular stocks, after-hours for less popular ones
2. Use smart techniques: When liquidity is low, consider converting fractional to whole shares; when urgent, place limit down sell orders
3. Control costs: Make sure each transaction is large enough so that fees don’t eat into your profits

Master these tips, and selling fractional shares will no longer be difficult. You can then navigate the small-cap investment journey with greater agility.