Partial Share Selling Guide: When to Sell, How to Sell Effectively? Complete Analysis of Trading Rules and Fees

Trading Rules Are Fundamental: Understanding the Differences Between Intraday and After-Hours Trading

To successfully sell fractional shares, the first step is to grasp the distinctions between trading sessions. Since October 2020, Taiwanese investors are no longer restricted to after-hours sporadic trading; they can now operate fractional shares during regular trading hours.

Intraday Fractional Share Trading starts at 9:00 AM and ends at 1:30 PM. During this period, the system conducts a call auction matching every minute. After the first match at 9:10 AM, it automatically searches for matching counterpart orders every minute. Orders placed during this session can only be submitted through the broker’s online platform; phone or manual orders are not accepted. If not all shares are filled during intraday trading, the unfilled portion will not be automatically retained and must be resubmitted.

After-Hours Fractional Share Trading opens at 1:40 PM and continues until 2:30 PM. This session offers more flexibility, allowing investors to place orders online or call broker customer service for manual orders. The key point is—only one call auction matching occurs at 2:30 PM, after which all unfilled orders automatically expire.

Advantages and Disadvantages of Selling Fractional Shares: Why Is It Sometimes Difficult to Complete Transactions?

Advantages: Fractional share trading has become an accepted regular trading method on the Taiwan Stock Exchange, no longer considered fringe trading. As long as the stock has sufficient liquidity, selling is not difficult. A single order can submit up to 999 shares, which is quite convenient for investors holding small amounts.

Disadvantages: Liquidity issues. For less popular stocks, fractional trading volume is much lower than full shares, and matching may take longer. If you hold fractional shares of niche stocks, you may face multiple orders remaining unfilled. Additionally, fractional trading incurs a minimum commission fee (usually starting at NT$20). If the trading amount is too small, the fee may outweigh the profit, leading to losses.

How to Sell Fractional Shares: Three Practical Tips

Tip 1: Use Limit Orders at Limit-Up Price During After-Hours Trading

Since after-hours trading only offers one matching opportunity, it emphasizes “one shot to hit the target.” If you want to sell quickly, placing a limit order at the limit-up price can increase the chances of execution. The system follows the “maximum transaction principle,” giving priority to higher-priced orders. Conversely, if you want to buy a stock but worry about missing out, you can also place a limit order at the limit-up price.

Tip 2: Convert Small Lots into Whole Shares to Accelerate Transactions

Suppose you hold 700 shares of an obscure stock; relying solely on fractional sell orders might be time-consuming. Instead, you can reverse the process—buy 300 shares to make a total of 1,000 shares (one lot), then sell the whole lot in the regular market. Whole share trading has much higher liquidity than fractional trading, significantly increasing the likelihood and speed of execution. This technique is especially suitable for less mainstream stocks.

Tip 3: Master the Opening Session

The first matching at 9:10 AM usually has the strongest liquidity and most active bidding. If your fractional shares belong to a moderately followed stock, placing an order immediately after the market opens can greatly improve the chances of executing on the same day. Conversely, waiting until noon to place an order often results in fewer counterpart orders.

Breakdown of Fractional Trading Costs: How Much Are the Fees?

The commission fee for fractional shares is calculated the same as for full shares, at 0.1425% of the transaction amount. However, with the introduction of a minimum fee mechanism, small transactions’ relative costs are significantly higher.

Example Calculation: Buying 200 shares of TSMC (assuming a closing price of NT$1,065)

• Transaction amount: 200 × 1,065 = NT$213,000
• Commission fee: NT$213,000 × 0.1425% = NT$303.53

If the broker offers a 50% discount for electronic orders, the actual fee drops to about NT$152. But if the transaction amount is only NT$3,000, the 0.1425% fee is less than NT$20, so it will be adjusted to the minimum fee of NT$20. This results in a fee rate of 0.67%, nearly five times higher than for large transactions.

Major Broker Fee Comparison

What Are Fractional Shares? Why Do They Occur?

Fractional shares refer to holdings of less than 1,000 shares (one lot), with the minimum trading unit being 1 share. They often arise from unfilled orders—such as when your sell order price exceeds the market price or the executed quantity reaches the order limit before full execution. Some fractional shares also occur during dividend distribution or stock split processes.

Trading fractional shares allows holders to receive dividends and cash out fractional amounts or consolidate holdings. The Taiwan Stock Exchange explicitly recognizes the legality of fractional share trading, so investors can operate with confidence.

Pros and Cons of Investing in Fractional Shares: When to Buy, When to Sell

Suitable scenarios for fractional investing: Limited funds but want to participate in large, high-quality stocks; engaging in regular, long-term dollar-cost averaging; small-scale exploratory buying to observe stock behavior.

Caution advised in: Low-liquidity stocks where fractional trading volume is far below expectations; high transaction costs relative to small amounts; frequent trading within a short period, which can accumulate costs.

For small investors, the core of fractional share selling is to—choose stocks with better liquidity, utilize high-price strategies during after-hours, appropriately employ the “convert small to whole” technique, and monitor the proportion of fees—only then can the investment threshold be lowered without hidden costs increasing.