Tiny Trading | Mini Investment Opportunities For The Masses

23 March 2022

Mia Nelson

When the first internet prototype connected various computer networks around the world together in 1983, no one had an idea of how it would change the world of investing. Prior to the internet, personal investing involved calling your broker, discussing what you wanted to do, and waiting for them to complete the task and call you back. With a few clicks of a mouse or by logging into a mobile app, however, today's investors can bypass all that waiting and make their own decisions and purchases, from fractional shares of stock to micro futures contract trading. As brokerage houses began to understand what investors wanted, opportunities grew, and also shrank.  

Traditionally, investors were required to invest large sums of money at once to make it worth their broker's time and effort. Buying 100 shares at a time is not in every investor's budget, however. In fact, brokers had a name for the purchase of anything less than 100 shares at a time—an odd lot. The purchase of odd lots was not necessarily discouraged, but there were higher fees for placing an odd lot order. 

Luckily, the advent of the internet eliminated the need to purchase odd lots through a broker. Today individual investors have options for buying in smaller quantities, including:

• Fractional shares. Instead of buying 100 shares or even one whole share, investors can now purchase fractional shares of stock. If a stock is trading at $100 a share, they can invest ten dollars and buy just a fraction of a share. Over time, their continued investments and dividend reinvestment can result in ownership of a whole share.
• Micro futures. Futures trading is agreeing to purchase something at a set price on a set day in the future. Like stocks, investing in futures can be expensive. One of the newest opportunities for personal investors is micro futures trading, which allows investors to invest in smaller, more affordable contracts that are about 1/5th the size. 
• Penny stocks. Penny stocks are simply stocks that are traded for less than five dollars a share. While investing in them carries increased risk, penny stocks allow investors to purchase a larger quantity than average due to the lower price of each share.

Modern investing is truly a case where size does matter. Smaller shares of stock, lower-priced stocks, and micro futures trading all let budget-minded investors dip their toes in the stock market in a way that they never could before. 

Contact a financial advisor near you to learn more about topics like micro futures trading. 

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