How to buy odd lots to reduce risk? Complete guide to intraday and after-hours trading times and fees

Many small investors want to enter the stock market but are limited by funds. How to buy fractional shares has become a popular topic. Instead of waiting for a large sum of money, it’s better to start with flexible fractional share trading. This article provides a detailed analysis of the timing, fee calculation, and practical trading tips for fractional shares to help you invest wisely.

Overview of Risks and Advantages of Fractional Share Trading

Why should small investors pay attention to fractional shares?

The introduction of fractional share trading breaks the traditional “minimum one full share” restriction, allowing investors to enter without needing to accumulate 1000 shares (1 lot). The minimum unit for fractional shares is 1 share, with a maximum of 999 shares, which is undoubtedly great news for investors with limited funds.

However, fractional share trading is not perfect. The biggest concern is lower liquidity; less popular stocks have fewer transactions, and multiple orders may be needed to complete a trade smoothly. Additionally, transaction fees are also a factor—fractional share buying and selling usually have a minimum fee (about NT$20). If the trade amount is very small, the fee proportion becomes significant.

How to Buy Fractional Shares: Complete Timing Analysis

Intraday Trading vs After-hours Trading

Since October 2020, Taiwan Stock Exchange allows investors to buy and sell fractional shares during intraday hours, changing the previous limitation of only trading after hours. Now, you have two trading windows:

Intraday Trading Hours (9:00-13:30)

• Order method: Only via electronic platform (broker app)
• Matching method: First match at 9:10, then one auction per minute
• Order priority: Price priority, then time priority at the same price
• Important reminder: Unfilled orders during intraday will not be automatically retained for after-hours trading and need to be re-entered

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

• Order method: Electronic or phone manual orders
• Matching method: Single auction at 14:30
• Order priority: Price priority, then random order at the same price
• Note: Unfilled orders are automatically canceled and do not carry over to the next day

How to choose the trading session?

Investors eager to enter the market should prefer intraday trading for faster market responsiveness; if aiming to increase the chance of execution, after-hours trading is more advantageous because each match follows the “maximum execution principle.”

Cost Analysis of Fractional Share Trading

Fee Calculation Method

How to buy fractional shares: The fee calculation is exactly the same as for full shares, at 0.1425% of the transaction amount. However, different brokers set different minimum fees, and electronic orders often enjoy discounts.

For example, purchasing 200 shares of TSMC (closing price NT$1065):

Basic fee = 200 × 1065 × 0.1425% = NT$303.53

If the broker offers a 50% discount: Actual fee = NT$303.53 × 50% = NT$151.77

Mainstream Broker Fee Comparison

Recommendation: To effectively reduce transaction costs, it’s best to make a single purchase of over NT$10,000.

How to Buy Fractional Shares: Practical Tips Revealed

“Converting cents into dollars” Strategy

If you hold less popular stocks (e.g., Shin Jin 1582), it can be difficult to execute trades during intraday hours. In such cases, adopt the “convert cents into dollars” approach—for example, buy 300 shares and combine with your existing 700 shares to make a full lot of 1000 shares, then sell the full lot via more liquid full-share trading. This not only makes transactions easier but also avoids liquidity issues with fractional shares.

Optimizing Listing Strategies to Improve Success Rate

During after-hours trading, since only one matching opportunity exists, strategic listing can significantly increase the chance of execution:

• When eager to buy: Place a buy order at the limit-up price to prioritize execution under the maximum transaction principle
• When eager to sell: Place a sell order at the limit-down price, enjoying the same priority

Seize the Golden Window for Execution

Information on fractional share prices for less popular stocks is updated in real-time. Investors can observe large buy or sell orders that haven’t been filled, and choose to place orders in the opposite direction at opportune moments, increasing the likelihood of successful trades.

Rights and Protections for Fractional Share Investors

Fractional share holders enjoy full shareholder rights:

• Dividends: Fractional shares can receive dividends proportionally; unclaimed dividends for expired fractional shares are paid out as cash
• Rights issues: During rights offerings, fractional shares participate in distributions, then the exchange consolidates and sells them collectively
• Trading flexibility: Fractional shares can be freely bought and sold, but cannot be entrusted for buying (only for selling)

Beyond Fractional Shares: Are There Other Small-Amount Investment Methods?

If concerned about liquidity and fees, CFDs (Contracts for Difference) offer an alternative:

CFDs are financial derivatives where investors only need to pay a margin (about 5%) to participate in stock price movements without owning the actual shares. For example, buying 5 shares of Google normally costs $2000; via CFDs, only $100 margin is required.

However, CFDs are suitable for short-term trading; holding positions overnight incurs interest costs and is not recommended for long-term holding. Compared to this, fractional shares remain the preferred choice for long-term small investments.

Account Opening and Entry Tips

Opening an account is simple: just provide ID, a second ID (health insurance card or driver’s license), and a bank account. After opening, select the “fractional share trading” mode in the broker app, and set the order quantity to 0-999 shares—just like full shares.

Final Investment Advice on How to Buy Fractional Shares

How to buy fractional shares has become an essential skill for small investors in Taiwan. This trading method lowers the barrier to entry, allowing investors with limited funds to participate in the stock market. But success depends not only on “knowing how to buy” but also on:

1. Understanding your risk tolerance — choose suitable stocks and strategies
2. Mastering fundamental analysis — avoid blindly following trends
3. Calculating fee costs — ensure each trade’s profit covers costs
4. Flexibly using trading sessions — select intraday or after-hours based on market conditions

As fractional share trading becomes more popular, regardless of the amount, rational investing and continuous learning are the keys to long-term profitability.