FRACTIONAL TRADING

Our fractional trading feature enables you, in addition to standard investments, to buy and sell fractions of some eligible financial instruments (shares, ETFs and Themes Trading). In other words, you simply indicate the amount you want to invest and thereby receive the corresponding fraction of your chosen financial instrument. This allows you to invest in financial instruments with very high unit prices even if your trading budget is limited, and set recurring investments with a fixed amount defined by you.

As the purchase and sale of fractions (e.g. 0.5 share of ABC Ltd) is not possible as such on the market, trading and holding fractions is different from trading the financial instruments directly. To allow you to invest in fractions, Swissquote acquires a whole unit of the financial instrument on the market, holds it in a fiduciary capacity for your account and grants you a right (a so-called “fiduciary interest”) in proportion of the fraction you acquired.

To allow you to invest in fractions, Swissquote holds the relevant financial instruments in its name but in a fiduciary capacity, for your account. To do so, Swissquote grants you a fiduciary interest in proportion of the fraction you acquired. For example, if you buy 0.5 share of ABC Ltd, Swissquote will hold the whole unit of said share in a fiduciary capacity and grant you a fiduciary interest on such share in proportion of the 0.5 amount you acquired. 

This concept is further explained in our Fractional Trading Agreement for Trading Accounts.

Yes, you are the beneficial owner of a financial instrument in proportion of the fraction you acquired.

Yes, fractional trading is even made for Saving Plan! It allows you to define the exact amount you want to invest at the selected frequency (e.g. invest CHF 10 of ABC Ltd every week).

Fractional trading is not available for all financial instruments. Eligible financial instruments are clearly labeled on our platform.

In the overview of your positions in your Swissquote account, just hover your mouse on the information icon. A dialog box will show you the breakdown between financial instruments and fiduciary interests that you hold.

 There are two ways to place “buy” orders:

• You enter a specific quantity (e.g., you submit an instruction to buy exactly 0.3 shares of ABC Ltd); or
• You enter the amount you want to buy (e.g., you submit an instruction to acquire CHF 1’000 worth of shares of ABC Ltd).

For "sell" orders, you may only place orders for a specific quantity. 

If your order size is below one whole unit, only market orders are available.

If you place an order with a quantity of one unit or more, the following order types are available: market, limit, stop limit.

Recurring orders are available only for "buy" orders, with the exception of "buy" orders entered for a quantity below one whole unit. 

Other orders, such as One-Cancels-the-Other (OCO), trailing stop, trailing stop limit and stop orders, are not available for fractional trading.

You can generally place orders at any time and even when markets are closed. Where applicable, the orders will then be executed in accordance with the below schedules (see next question).

Order execution and applicable trade prices are described in our Best Execution Policy for Trading Accounts.

Orders will usually be executed during standard market opening hours and when market conditions allow. However, please note that i) all market orders to buy or sell (in total) less than one whole unit of a financial instrument and ii) market orders to buy a financial instrument based on a currency amount will only be executed during the following hours:

• Swiss markets: on trading days from 9:10 to 17:20 CET
• European markets: on trading days from 9:10 to 17:20 CET
• UK markets: on trading days from 9:10 to 17:20 CET
• US markets: on trading days from 15:40 to 21:50 CET
• Themes: on trading days from 9:25 to 17:05 CET

No, you can place orders for any quantity up to four decimal places.

Yes. The fiduciary interest you hold will, as a principle, be on a fraction (e.g. 0.5) of a whole unit of a financial instrument. In certain circumstances, however, you may hold a fiduciary interest on a whole unit (or more), e.g. if you have purchased several fractions of a same financial instrument (e.g. you acquired 0.5, then 0.25 and 0.25).

If you reach a fiduciary interest on a whole unit (or several whole units), we will generally convert your fiduciary interest into a holding of a whole unit of said instrument. Following the conversion, you will no longer hold the relevant as a fiduciary interest under the Fractional Trading Agreement. Rather, you will yourself hold the financial instrument and your rights in relation to it will be governed by the other agreements entered into between you and Swissquote.

We aim to execute conversions periodically (e.g. once a day), but we do not undertake to do so within a specific timeframe.

Yes, you will in principle receive a dividend amount proportional to the fiduciary interest you hold.

For example, if you own 0.20 fiduciary interest on an ABC Ltd share, you will receive 20% of the ABC Ltd dividend.

We offer limited support in connection with corporate actions for fiduciary interests. You should carefully consider the limitations of our services as set forth in our Fractional Trading Agreement for Trading Accounts. 

In particular, we will only inform you of a corporate action affecting your fiduciary interests if the only option to participate in the corporate action is to make a cash payment. In case a corporate action gives you a choice between several options, we will – without consulting you – select the option that does not require you to make a cash payment or, if there are several such options, we will act at our sole discretion with the purpose of protecting your presumed interests.

Please note that if your cumulative fiduciary interests on a single financial instrument reach one whole unit, they are generally converted into a holding of a whole unit of the financial instrument and no longer be governed by the Fractional Trading Agreement for Trading Accounts. 

No. As a holder of fiduciary interests, we will not register you as the registered holder of the financial instrument concerned nor take any action to allow you to exercise voting rights. 

You can only register and exercise voting rights for whole financial instruments that you hold. Please note that if your cumulative fiduciary interests on a single financial instrument reach one whole unit, they are generally converted into a holding of a whole unit of the financial instrument.

No. Fiduciary interests cannot be transferred. 

Transfers are only possible for whole financial instruments that you hold. Please note that if your cumulative fiduciary interests on a single financial instrument reach one whole unit, they are generally converted into a holding of a whole unit of the financial instrument.

No. Securities lending is not available for fiduciary interests. 

Securities lending is only available for whole financial instruments that you hold. Please note that if your cumulative fiduciary interests on a single financial instrument reach one whole unit, they are generally converted into a holding of a whole unit of the financial instrument.

The fees applied to fractional trading are the same as the ones applied for standard investments, as set forth in the fee schedule published on our website.

If you are entitled to distributions to which a withholding tax or similar taxation applies, we will generally seek to apply this potentially lower withholding or other tax rate to your fiduciary interests.