Fractional ownership
You can buy or sell just a fraction of an asset, so you can control more precisely where your funds go.
You can buy and sell CFDs by units or amount. You can trade from as little as 1/1000 of a unit, or a specific amount in dollars. This allows you to buy or sell just a fraction of the asset, and sets new standards in precision asset allocation. With a traditional broker, the smallest trade size in units would be 1 share, with fractional ownership you could decide to invest in a half or even a tenth of a share. This means you can spread your funds out over a variety of different trades instead of having to invest more than you’d like in one position.
Fractional ownership examples
Example 1:
The price of Gold in this order ticket is $1,514.22 an ounce. With our fractional ownership feature you can decide to trade an exact dollar amount of $500, which equates to just 0.537 units. Or use the toggle arrows to enter an exact unit amount instead: the decision is yours.
Example 2:
You want to buy a US company, DEF, at $500.00 a share, but you only have $100. You are keen to outlay the full amount (instead of trading on margin) for this trade so that you have no financing costs. With fractional ownership it’s easy to do just that.
One company share equals 1 unit, and 1 unit costs $500.00. With fractional ownership you can choose to buy just 0.2 units, or just $100 worth.
If the price of DEF rises to $600:
Profit = (Sell Price – Buy Price) x Number of Units
Profit = ($600 – $500) x 0.2
Profit = $20
If the price of DEF falls to $450
Profit = (Sell Price – Buy Price) x Number of Units
Profit = ($450 – $500) x 0.2
Loss = $10
Many investors will use amounts greater than 1 unit but it is useful to know that if you want to trade smaller sizes, fractional ownership allows you to do so and it helps you achieve your investment objectives.