Partial Share Selling Guide: Master Trading Timing and Techniques to Double Execution Efficiency

Selling fractional shares: A comprehensive guide for Taiwanese investors

In recent years, selling fractional shares has become essential knowledge for small investors in Taiwan. Many investors, after initially purchasing fractional shares, feel confused about when to sell and how to increase the chances of successful transactions. This article systematically analyzes key timing, trading rules, practical tips, and cost considerations for selling fractional shares, helping you make smarter decisions in the market.

What are fractional shares? Why is the selling guide so important?

Fractional shares refer to stocks less than 1,000 shares (one trading lot), with the minimum trading unit being 1 share. Investors often acquire fractional shares because their original buy orders were not fully executed or due to stock dividends resulting in leftover fractional shares. Since Taiwan Stock Exchange opened intraday fractional share trading in late October 2020, buying and selling fractional shares has become widespread. Consequently, the demand for a selling guide has greatly increased.

Compared to whole shares, trading fractional shares faces more challenges: lower trading volume, poorer liquidity, and increased difficulty in selling. Therefore, mastering correct methods and techniques for selling fractional shares is crucial to ensure efficient transactions.

Key timing for selling fractional shares: intraday trading vs. after-hours trading

Intraday fractional share trading hours and rules

Intraday fractional share trading begins at 9:00 AM. Investors can submit sell orders from 9:00 to 1:30 PM. Note that during this period, orders can only be placed electronically via brokerage platforms; phone orders are not accepted.

Intraday trading uses a call auction matching mechanism. The first match occurs at 9:10, followed by automatic matches every minute using the same mechanism. Transaction priority is based on “price priority, then time priority at the same price.”

After-hours fractional share trading hours and rules

After-hours trading runs from 1:40 PM to 2:30 PM, during which investors can submit sell orders via electronic or phone orders. Unlike intraday multiple matches, after-hours trading conducts only one call auction at 2:30 PM, with transaction priority based on “price priority, then random order at the same price.”

Important reminder: Orders not filled during intraday trading or partially filled will not carry over automatically to after-hours. Investors need to resubmit orders during the after-hours session. Additionally, unfilled orders after trading ends are automatically canceled and will not carry over to the next trading day.

How to improve selling efficiency? Three practical tips

Tip 1: Set a reasonable selling price

In intraday trading, if the set selling price is too high, orders are likely to remain unfilled. In this case, consider using the “sell at the limit down price” strategy during after-hours. Since after-hours trading only conducts one call auction based on the “maximum transaction volume” principle, placing a sell order at the limit-down price maximizes the chance of a successful sale.

Conversely, if you need to sell quickly during intraday hours, consider adjusting your price to be more competitive.

Tip 2: Convert fractional shares into whole shares

For less-traded, unpopular stocks (e.g., Xinjin), selling fractional shares can be particularly difficult. A useful approach is to “convert fractional to whole”: buy additional fractional shares to reach a full lot (1,000 shares), then sell the whole lot on the more active market.

For example, if you hold 700 shares of a niche stock, buy an extra 300 shares to make a full lot of 1,000 shares, then sell on the whole-share market for better chances of success.

Tip 3: Choose the right trading time

Different times of day have varying liquidity. Popular stocks tend to trade faster during intraday hours, while less popular stocks may require waiting for after-hours trading or re-listing the next day. Investors should select the most suitable trading period based on the stock’s trading characteristics and prepare backup plans.

Cost analysis of selling fractional shares: How are commissions calculated?

Commission fees for fractional shares are the same as for whole shares, at 0.1425% of the transaction amount. Most brokerages set a minimum fee (usually NT$1) and offer discounts for electronic orders.

Example calculation

Suppose you sell 200 shares of TSMC at NT$1,000 per share:

200 shares × NT$1,000 × 0.1425% = NT$285

If your broker offers a 50% discount for electronic orders, the actual fee is:

NT$285 × 50% = NT$142.5

Different brokerages offer varying discounts: Fubon Securities offers 18% of the standard fee (1.8折), E.SUN Securities offers 20% (2折), Uni-President Securities offers 16.8% (1.68折), and Shin Kong Securities offers 10% (1折). Compare these options before opening an account.

Common questions and solutions for selling fractional shares

Issue 1: Low liquidity prevents transaction

Many small-cap or unpopular stocks have very low fractional share volume. If unable to sell during intraday, try relisting at a more competitive price during after-hours or the next day. If still unsuccessful, convert fractional to whole as an effective alternative.

Issue 2: Risk of order cancellation

New investors often overlook that unfilled orders during after-hours are canceled at the end of the trading day. To keep orders active for the next day, resubmit them the following day.

Issue 3: Time limit restrictions

Converting fractional shares into whole shares is subject to time limits; if overdue, the order expires. Investors should complete operations within the deadline or resubmit.

Is selling fractional shares suitable for you? Full assessment of pros and cons

Advantages of selling fractional shares

• High liquidity flexibility: Allows selling as little as 1 share, enabling phased exits and profit locking without needing to sell large amounts at once.
• Periodic liquidation: For long-term, regular investment plans, fractional selling offers flexible cashing-out without waiting to accumulate full lots.
• Low risk testing: Small initial investments can be quickly tested in the market, allowing strategy adjustments.

Disadvantages of selling fractional shares

• Lower transaction efficiency: Compared to whole shares, fractional shares take longer to sell and are less suitable for short-term quick trades.
• Relatively higher fees: Although the rate is the same, small-volume fractional trades mean higher fee ratios, which can eat into profits. For example, buying NT$1,000 worth of 1 share with a NT$20 fee results in a 2% fee rate.
• Market operation limitations: Certain operations, like converting fractional to whole shares, are time-limited. Missing the deadline results in order expiration, increasing operational complexity.

Summary: Core points of the fractional share selling guide

The guide covers three main aspects: timing (intraday vs. after-hours), trading techniques (convert to whole, set strategic prices), and cost control (calculate fees, choose optimal broker).

For small investors, the key is to select appropriate trading times based on stock liquidity and to use price strategies to improve success rates. Simultaneously, evaluate fee costs rationally to ensure profits are not eroded. Finally, before starting, thoroughly learn trading rules and practice on demo platforms to familiarize yourself with each broker’s procedures.