The ability to buy by millionth of a share lets Robinhood undercut Square Cash’s recently announced fractional share trading, which sets a $1 minimum for investment.
Robinhood users can sign up here for early access to fractional share trading.
We believe that fractional shares have the potential to open up investing for even more people.”
Fractional share trading ensures no one need be turned away, and Robinhood can keep growing its user base of 10 million with its war chest of $910 million in funding.
Stocks worth over $1 per share with a market capitalization above $25 million are eligible, with 4000 different stocks and ETFs available for commission-free, real-time fractional trading.
But in just the past month, Alpaca raised $6 million for an API that lets anyone build a stock brokerage app, and Atom Finance raised $10.6 million for its free investment research tool that could compete with Robinhood’s in-app feature.