← Stocks · lesson 4 of 12
By the end of this one you'll know what a share really costs, what a fractional share is, and exactly what $100 does and doesn't buy.
A share is one small piece of a company, and some single shares cost more than a fancy washing machine. That used to lock regular folks out, like being told you can only buy beef by the whole cow. But many of the apps and companies that place stock orders, called brokers, now offer fractional shares, which just means a fraction, a piece of a piece. It's the deli counter rule: you say the dollars, they cut the slice. Ask for $100 of something and you get exactly $100 worth, so even if a full share costs $400, you'd own a quarter of one share. Your quarter rises and falls right in step with the whole share, same as a quarter cow is the same beef as the whole animal. The dollars decide the size, not the sticker price.
Same lesson, told by a hundred dollar bill. Tap to walk it one step at a time.
In this example one share costs $400.
With whole shares only, $100 buys nothing, you're locked out.
With fractional shares, $100 buys 0.
25 of a share, a clean quarter.
If the share price climbs 10% to $440 that quarter shows $110, and if it falls 10% to $360 it shows $90.
Grandma mails your son 100 dollars for his birthday with a note that says buy him a piece of something real. He announces he wants a piece of the company that makes his game console, and one share of it costs 400 dollars. You're standing in the kitchen holding a check and a problem.
Pick your move. Then peek at the other roads if you're curious.
Fractional shares mean your dollars decide the size of the slice, not the price on the sticker.