Interactive Brokers is clearly not taking any chances. Following the removal of trading commissions recently, the venture decided to work on its trading application. The software now has provisions that allow its customers to participate in the fractional stock trading.
Smart Strategy
Interactive Brokers is not just taking this route without any reason. They are doing so because they want to expand their customer base. The younger section of the demographics is the target here. It is a technique that seeks to provide a solution for many customers. Many clients have issues when it comes to putting their funds in a diversified portfolio of listed securities in the United States of America. This problem is was the venture is trying to solve. Fractional stock trading has the advantage of giving investors the chance to diversify their holdings. This is done by placing their funds on several stocks.
The entry of Charles Schwab
One of the pioneers in the area is Charles Schwab. It is one of the very first main broking firms in the country to make way for investors when it came to fractional stock trading. Taking the no-fee trading saga into consideration, this is a strategy that can lead to a frenzied stage. Other stakeholders can also decide to take the same route. There is an intensification of competition in the section. All the firms are trying their very best to get as many clients as possible.
The new application from Interactive Brokers is touted as the real deal. It is easily used with IBKR Lite and Pro customers. This is seen as ideal for those who cannot shell out the relatively outrageous fees charged by other ventures like Google or Amazon.
The company is optimistic in the face of all the challenges. It is stating that those investors who are looking at diversifying their investments can now do so with ease. It is now possible for them to engage in fractional share trading. Investors will now be able to do so based on the budgets that they set comfortably for themselves.
Desperate Competition
Recently, Interactive Brokers did away with the trading commissions totally. This triggered a struggle in the ranks of the brokers. As a matter of fact, the move stimulated virtually all the other rivals to also slash their fees. It all happened so fast that analysts could not but notice what was going on.
Schwab remains one of the biggest players in the field. It is clearly pushing the limits and it is apparent that Interactive Brokers is paying close attention. This is also the same trend as other players too. That explains why others like TradeStation and Fidelity have also done away with the commission fees and are considering moving into fractional trading. In fact, they are poised to also offer fractional stock trading to their investors in a matter of weeks. One thing is certain in all these desperate contests and that is the fact that they are all trying to gain as much of the market share as they can.
