Fractional investing is one of the unique things about the US stock markets. Investors can own fractions of stocks, unlike in countries like India. So, for instance, you could own 0.01 of an Amazon stock.
Fractional investing is useful because of the following reasons:
You can decide to invest based on a certain amount of money. For instance, if a stock is valued at $100 and you decide to invest $10 in it, you will still get 0.1 shares.
Many US stocks are really high-priced. For example, Amazon’s shares cost around $2,000 each. So, with fractional stocks, you could effectively build a diversified portfolio even with small amounts of money.