What is a half stock?

A half stock is a security sold with a par value that is 50% of what is considered to be the standard price. The par value refers to the face value of a bond, or in some cases, a stock. Half stock can be either common stock or preferred stock and, other than the reduced par value, acts as a regular share of stock.

Can a mutual fund invest in fractional shares?

Mutual funds have long supported fractional share investing, but until recently you could only own fractions of shares in a few limited ways: Stock splits or reverse stock splits. When a company splits its stock, it boosts its share count by giving shareholders additional shares of stock.

Are all stocks & ETFs available as fractional shares?

In addition, not all stocks or ETFs offered for sale on an investing platform are available as fractional shares. Charles Schwab, for example, only sells fractional shares of companies in the S&P 500, while Stash offers a curated list of stocks and ETFs.

What happens if you liquidate fractional shares?

That said, liquidating fractional shares may have unintended tax consequences if your fractional shares have increased in value. Dividends: Just as fractional stocks represent a portion of a full share, if you own fractional shares, you’ll get the portions of stocks’ dividends.