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No. of Recommendations: 0
I need some help with a recent purchase I made on Fidelity. Since the beginning of the year I have been transferring $500 to Fidelity and shortly after the funds arrive I've been making partial share purchases of Amazon. Every month a purchase is made for AMZN and the purchase price has been something slightly below $500 (i.e.: $498, $499, $495, $497, $498). For some reason the June purchase wound up being three (3) transactions for $5.47, $58.99 and $430.00. I would really like to know what I did wrong and generated multiple transactions for the same purchase. I want to avoid doing this again next month. It's bad enough having fractional shares but now I've got these tiny little mini-shares.

I called Fidelity and after finally getting a person to talk to she referred me to a trader and while the trader could look at my account and understand my problem she didn't know the answer and put me on the Hold from Hell. My time is valuable plus it was getting close to lunch time. 30 minutes on Hold is a little much.

Anyone have a clue as to what I did wrong so I won't repeat this again next month?

Incidentally a used this same strategy last year and purchased Fidelity's FBGRX. All 12 months worked out to a purchase of slightly less than $500/mo. For what it's worth FBGRX kinda sucks. I have much better luck with individual equities rather than funds.

Thanks for your help.

Regards,

ImAGolfer (retired '03)
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No. of Recommendations: 3
I don't know the answer, but it's probably explained in the brokerage account agreement you signed when you opened the account.

For whole share transactions, the broker can purchase/sell the total number of shares in multiple lots unless the order is submitted "all or none". I imagine something similar applies to fractional share transactions.

Ira
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When this happened to me I noticed the transaction fees were prorated across all of the transactions.

I've also seen different prices for each transition. I.e. for a 20 share purchase, 10 shares @ $50, 10 @ 49.99.
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No. of Recommendations: 4
Hi ImAGolfer,

I suspect that is how the order flow matched your buy bid to current sales asks.

Keep in mind that there is "someone" on the other side of every transaction.

The exchanges matches buyer and seller bid/ask to complete every buy/sell transaction.


While I don't do fracs, I bought 500 shares of a stock in May. The order filled in 8 different pieces from a single share to 200 shares. The end result was 500.

I have had similar happen for sells also.


"It's bad enough having fractional shares but now I've got these tiny little mini-shares."

The only place you will see this is in your history/transaction log.

In your "main" screen, you should just see n.nnnn shares of AMZN.


If this is a taxable account and you sell, you can bundle lots and just say "various" for the date.

If this is in a retirement account, it does not matter at all.

For my records, I just add everything together and make one entry for the buy or sell.


Does that help you?

Gene
All holdings and some statistics on my Fool profile page
http://my.fool.com/profile/gdett2/info.aspx
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No. of Recommendations: 1
Does that help you?

Hey Gene. Yes. Not what I wanted to hear but in the long run it ain't going to be me selling this stuff anyway. The boys can figure it out on their own.

It's a taxable account. The IRA should go to the boss and if she bites the bullet then the boys have 10 years to dissolve her IRA as well as her inherited IRA (from me).

At this point I'm planning on many more rounds of golf and the boss is planning on needlepointing the Texans logo on the field of NRG stadium and on weekends she plans to attend every estate sale in the greater Houston area with the exception of those hosted by Margie Beagle.

Thanks,

ImAGolfer
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No. of Recommendations: 2
I don't think you did anything wrong. I think it was just the bid/ask circumstance of this particular trade. I recently became the Ticker Guide for JFrog and opened a position, as is my custom. When the trade confirmations came in, I had all but half a share in one trade, and the final half in another. But I ended up with all the shares I wanted.

As for being on hold, just about every company around is suffering from staffing shortages, which leaves those in call centers handling larger volumes with fewer resources. I was just dealing this month trying to cancel an website hosting service. They wouldn't do it online, they wouldn't do it by phone, they would only do it by email. And even now, I'm not sure if they processed a refund for charging me AFTER I requested the cancellation.

I've just resolved to be as patient as I can. Help goes better with honey than vinegar.

Fuskie
Who is not bothered by factional shares and hasn't paid trade commissions in years...

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It is not uncommon for small dollar purchases, especially in the case where you will always be purchasing fractional shares, to be broken into multiple orders. You just had the luck of never experiencing it before.

I've got these tiny little mini-shares.

You shouldn't. Any fractional mini-shares should be added to all your other shares. For example, if you had 43.92 shares before and one if these purchases was for .19 shares, it is simply added to the total - now 44.11 shares.

You didn't do anything wrong, they didn't do anything wrong, no harm was done, and you are likely to experience this again in the future.

Actually, the harm that was done was the Fidelity person you spoke to not knowing this and wasting your time by transferring you.
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Of course the harm is the addition paperwork and record keeping required. Your trades did happen at market prices, several of them.
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Of course the harm is the addition paperwork and record keeping required

What record keeping? Cost basis is either average (requiring no record keeping - all done by Fidelity) or by individual lot (records also kept by Fidelity).
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Of course the harm is the addition paperwork and record keeping required

What record keeping? Cost basis is either average (requiring no record keeping - all done by Fidelity) or by individual lot (records also kept by Fidelity).


You can't use average cost for common stock except when it is part of a dividend reinvestment program.

It is your responsibility to maintain adequate historical records, not the broker. There are circumstances where the broker's records are not accurate and the broker has no obligation to adjust the cost basis to the correct amount. (There are some gaps in the actual law and regs such as the receipt of shares as part of the total liquidation of a partnership interest.)

Ira
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