Julie Jason: Investing in fractions.

When the investing apps Robinhood, Acorns and Stash came on the scene, a new type of saver emerged, one who could save money when making purchases (a microsaver). Then came the microinvestor, a saver who could buy small-dollar amounts of shares of stocks.

Microinvesting enables the purchase of less than a full share of a stock. Someone who had only $50 to invest could purchase a fraction of a share of, say, Apple, even though a full share costs more (about $119, as of the close on Nov. 12).

A few days ago (Nov. 9), the U.S. Securities and Exchange Commission issued an Investor Bulletin (“Important Items to Consider Before Investing in Fractional Shares”) on the subject — it’s worth a read.

Fractional share investing is innocent enough. What did the SEC want investors to know?

Fractional shares are offered only by some, not all, brokerage firms, with Fidelity Investments and Charles Schwab Corp. among the recent entrants to the field. That limits firms that will execute fractional share buy-and-sell orders — and the firms that will receive fractional shares if you intend to transfer your account to another brokerage firm.

When you research firms that offer fractional shares, find out about these potential differences.

1. Can I buy and sell any stocks, or are there limits on the type of stocks and other investments that are eligible for fractional share trading on your platform?

2. What are the details of order execution? Are trades executed in real time? Or do you aggregate orders for execution after collecting orders from other buyers and sellers?

3. Are there specific order types that are available (or limited) to buy or sell fractional shares? Some firms only allow market orders, according to the SEC.

4. Do minimum dollar amounts apply? For example, Schwab has a minimum order of $5, while

Fidelity’s minimum order is a penny, and Robinhood’s is $1. (Be sure to double-check these amounts online; they may change.)

5. What happens to dividends earned on fractional shares, and what about corporate actions? According to the bulletin, fractional share owners do receive dividends and participate in other corporate actions such as stock splits or reverse stock splits.

6. Do I have voting rights? That depends, based on the brokerage firm, according to the bulletin.

7. Is there a charge for trading? Some firms charge. Some don’t. You’ll have to ask.

8. Can I sell at any time? The bulletin points out that liquidity may be limited: “Some brokerage firms have indicated that they do not guarantee the liquidity of fractional shares, even if fully shares of the stock are liquid.” Be sure to find out.

For information, read the full SEC Investor Bulletin at tinyurl.com/yx9a4jkq. Also, the Financial Industry Regulatory Authority provides information on microinvesting at tinyurl.com/yxqdmsal.

Because the offering of fractional share investing can lead to more investors, microinvesting is a clear win for the young or new investor. But be sure to do your homework first.

On another note, by popular demand, I am offering a repeat of my free virtual presentation “Investing in a Coronavirus Stock Market,” on Thursday, Nov. 19, at 10 a.m., sponsored by the

Greenwich Library. To register, go to tinyurl.com/yywjlxa5 or contact Yang Wang, 203622-7924, ywang@greenwichlibrary.org. This is part of the library’s financial and investment programs.

Julie Jason, JD, LLM, a personal money manager ( Jackson, Grant of Stamford) and author, welcomes your questions/comments (readers@juliejason.com). Her awards include the 2018 Clarion Award, symbolizing excellence in clear, concise communications. Her latest book, a curated collection of Julie’s columns, is “Retire Securely: Insights on Money Management From an Award-Winning Financial Columnist.” To hear Julie speak, visit juliejason.com/events.