A pedestrian walks past a Charles Schwab office in New York.
Scott Eells | Bloomberg | Getty Images
Charles Schwab is yet again lowering the barrier to enter the world of trading stocks. The online broker will soon let its clients trade fractions of stocks, the founder and chairman told the Wall Street Journal in an interview.
In the coming months, Schwab clients that want to own Apple‘s stock, won’t need the entire $234.49 it takes to own an entire share of the highly valued technology giant. It’s a push to attract a younger demographic, Schwab told the WSJ.
“Schwab has been quite focused on younger customers for some time, but we’re sure it’s also been watching the success some of the other free trading platforms have experienced and moving in line on fractional share trading makes sense,” Devin Ryan, managing director at JMP Securities, told CNBC in an email.
Schwab is not the first company to take a stab at offering partial stock trades. Smaller companies like Stockpile, which was founded in 2010, have provided this type of service for 99 cents per trade. However, Schwab, which holds about $3.72 trillion in client assets, is the first major online broker to offer fractional trading. Other companies that offer partial trade are M1 Finance, Betterment and Stash.
Schwab didn’t detail when the launch of the service would occur or if the fractional trades would have fees.
Earlier this month, Schwab dropped all commission fees for U.S. stocks, ETFs and options trades. Brokerage rivals E-Trade and TD Ameritrade subsequently followed, dropping their commission fees as well. Interactive Brokers also slashed its fees.
“The move is complementary with the commission cut as it removes any remaining friction around single stock trading,” said Ryan.
Schwab told CNBC earlier this month that broker’s latest move to zero commissions was a longtime goal to deliver to investors.
Shares of Schwab rose nearly 1% on Thursday.
Charles Schwab could not immediately be reached for comment.
—Read the full Wall Street Journal story here.