What is a fractional share?

A fractional share is “a fraction of a share", i.e. less than one. Lightyear offers the opportunity to buy fractional amounts of many instruments we have on our platform to create more equal access to investing. Not everyone has the capital to invest in companies whose share price is in the hundreds or thousands per share. For example, if a company had a listed share price of 1000 USD and it was available as a fractional share, you would be able to buy 0.1 of that share for 100 USD.

The shares are fractionalised by the way of co-ownership, where you become the co-owner of the fractional part of the actual share. We do not offer fractionalised shares that are created as contract for difference (CFD) type of instruments, or any other type of derivatives associated with higher risks, as some other service providers do.

In a co-ownership structure, the shares belong to all investors in fractions, and the value of the fraction is proportionally linked to the value of the full share. This also means that any actions that occur in respect of the full share (such as corporate actions, e.g. dividend payments and stock splits) are allocated proportionally among the fractions and their owners.

Are all instruments available in fractions?

At the moment, not all instruments are available in fractions but we're working on making more available as soon as possible. If an instrument is traded fractionally, this will be shown on its instrument page with the “Fractional” label visible at the top. Right now, instruments on ISAs are not fractional but we are working on offering them.

How to find fractional instruments?

If an instrument is fractional, you'll see a label indicating this at the top of the instrument page. You can also sort your search using the filter “fractional”, or filter our stock screener and fund screener by fractions to find all fractional instruments.

What order types can I submit fractionally?

Only market buy and sell orders. You can place these in two ways: as a cash order, where you choose how much money you want to spend or receive, or as a quantity order, where you decide how many shares you want to buy or sell. Read more about market orders here.

Corporate actions and stock transfers on fractional trades

• If you hold fractional shares, corporate actions are still processed for you. You’ll receive the portion that matches the fraction of the share you own. For example, if there’s a 2-for-1 stock split and you own 0.5 of a share, your holding will be adjusted based on that, in this case, you'd end up with 1 full share after the split.
• Fractional shares cannot be moved in or out of Lightyear. To transfer your holdings, you need to ensure you hold full shares.

Do you pay dividends for applicable fractional shares?

Yes, we do, rounded to the nearest cent. You’ll receive the relative percentage proportionate to the amount of the share you hold, e.g. if you hold 0.5 of a dividend-paying share, you’ll receive 0.5 of the dividend amount. To find out more about what dividends are and when we pay them, see our Do you pay dividends help article.

Risks of investing in fractional shares

Fractional shares constitute a fraction of a single share in a company. This means that fractional shares are subject to the same investment risks as shares. However, there are some additional risks specific to fractional shares:

• Fractional shares represent claims on the custodian who has undertaken the fractionalisation of the fractional shares. This may impact how assets are returned to you in the event of Lightyear failing.
• Voting rights on fractional shares cannot always be offered. Lightyear does not currently support exercising voting rights arising from fractional shares.
• You can only insert a market order to buy fractional shares.
• Fractional shares are not transferrable, and to realise any value they represent, you are obliged to sell them through the Lightyear platform.
• Certain ownership rights regarding fractional shares can be subject to a rounding risk.
• To execute a fractional share trade, it may be aggregated with other trades in order to create a whole share that can be executed in the market, which may affect the price achieved.
• We charge the same percentage-based fees on fractional share transactions as on non-fractional share transactions.