 TITLE: What Are Fractional Shares? CONTENT: How Do Fractional Shares Work?\n------------------------------\nA fractional share is essentially a slice of a company's stock or an exchange-traded fund (ETF). For example, let's say you want to invest in Apple stock but the price of one share is $135 and you only have $75. In this scenario, you can purchase 0.56 shares of Apple with the money you have.\nFractional shares participate in both gains and losses just like normal shares, but in terms of real dollars, the impact is less.\nIf Apple stock jumps 10%, for instance, someone who owns a full share will see their position grow to $148.50, a jump of $13.50. If you only have $75 worth of the stock, you'll still get a 10% return, but the dollar value will be $7.50, bumping your position to $82.50.\nIn addition to purchasing a fraction of a share or ETF, there are other ways to get fractional shares:\n*   **Dividend reinvestment plans**: Called DRIPs for short, these plans allow you to reinvest dividends you earn on your stocks to buy fractional shares instead of taking the dividends as cash.\n*   **Mergers and acquisitions**: When one company acquires another, the common stock of each company is often combined at a certain ratio. The math doesn't always work out to give shareholders an even number of shares, though, resulting in fractional shares.\n*   **Stock splits**: A stock split occurs when a company increases its number of shares, which, in turn, decreases the value of each individual share. For example, if you have three shares of Apple stock with a $150 share price and the company does a 4-to-1 split, you'll now have 12 shares at a price of $37.50 per share. But as with mergers and acquisitions, the math doesn't always work out to give an even number of shares, so you may end up with fractional ownership. END