Hey everyone, just a quick question. So I’ve been dabbling in Stocks through Cash app and I was always wondering when I go for a stock or ETC, am I supposed to pay the exact stock price like $20.19 or should I round it out to the next dollar?
Probably stupid question to u professionals, but I’m just starting out and I was honestly confused
Posted by Fit-Dragonfly-3433
4 Comments
When you purchase or sell a stock, either action occurs at the price the stock is currently valued at.
It’s a bit more complicated than that because of bid/ask spread, but I’m trying to keep it simple.
Just send a market order which will fill at the live market price you see, you don’t need to round anything. Or you can also set a limit order which will only fill if the price is below $x. E.g if you put in a order for $20.15, it will only fill at $20.15 or lower.
Cash App, like a lot of newbie-focused apps these days, offers what are called “fractional shares”. You can invest $10 or $20 in a stock that’s currently at $20.19, and the app will tell you that you own 0.4953 or 0.9906 shares.
Under the hood, it’s true that the stock only really exists in whole numbers. What the broker (Cash App) will do is buy a whole share under their own account, and allocate various fractions of it to you and other investors. If you’re just investing a few bucks here and there, it’s not something you need to worry too much about yet.
If you do ever start investing more, Cash App is probably not the right place to do it – [their order types](https://cash.app/help/5028-order-types) don’t really match what’s going on under the hood in a way that’s going to cause problems with big investments. It’s not clear to me whether you can even create an order for a specific number of stock units.
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