Mastering Your Merrill Edge Investments: A Comprehensive Guide to Selling Fractional Shares
Hey there, savvy investor! Ever wondered how to streamline your portfolio, perhaps by selling off a portion of a stock without having to offload an entire share? You're not alone! Fractional shares have revolutionized how we invest, allowing for greater flexibility and diversification, especially when dealing with high-priced stocks. But just as buying them opens up new avenues, understanding how to sell them is crucial for effective portfolio management.
This in-depth guide will walk you through the process of selling fractional shares on Merrill Edge, covering everything from understanding the platform's policies to executing your trade and managing the proceeds. Let's dive in!
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| How To Sell Fractional Shares Merrill Edge |
Understanding Fractional Shares at Merrill Edge
Before we get into the "how-to," it's vital to understand Merrill Edge's stance on fractional shares. Unlike some newer brokerage platforms that allow direct purchase of fractional shares, Merrill Edge has historically focused on allowing fractional shares primarily through dividend reinvestment plans (DRIPs). This means if you own a full share of a stock and choose to reinvest its dividends, you might accumulate fractional shares over time.
Key Point: As of recent information, Merrill Edge does not currently support direct purchasing of fractional shares for most securities. However, you can still hold and sell fractional shares that you've acquired through DRIPs. This guide focuses on selling those existing fractional holdings.
Step 1: Getting Started - Log In and Locate Your Holdings
The very first step, and arguably the most important, is to access your Merrill Edge account. So, grab your login credentials and head over to the Merrill Edge website or open their mobile app.
Action Time:
Website: Go to
www.merrilledge.comand click on "Log In" in the top right corner.Mobile App: Launch the Merrill Edge app on your smartphone or tablet.
Once logged in, you'll want to navigate to your portfolio or account holdings. Look for sections like "My Accounts," "Portfolio," or "Holdings." This is where you'll see a comprehensive list of all your investments.
Tip: Familiarize yourself with the layout. Merrill Edge aims for a user-friendly experience, but knowing where everything is will save you time and frustration.
Tip: Reread complex ideas to fully understand them.
Step 2: Identifying the Fractional Shares You Wish to Sell
Within your portfolio view, locate the specific stock or ETF that has fractional shares you want to sell. You'll typically see the security's name, ticker symbol, the number of shares you own, and its current market value.
Sub-heading: Checking Your Share Quantity
Pay close attention to the "Quantity" or "Shares" column. If you see a decimal point in the number of shares (e.g., 10.45 shares), that indicates you hold fractional shares of that particular security.
Example:
If you own 10 shares of Company X and later through DRIPs, you accumulate an additional 0.45 shares, your total holding will show as 10.45 shares.
You can choose to sell the entire 10.45 shares, or just the fractional portion (0.45 shares), or any specific quantity.
Step 3: Initiating the Sell Order
Now that you've identified the security, it's time to place your sell order.
Sub-heading: Navigating to the Sell Function
Generally, you'll find a "Trade," "Sell," or similar button next to the security in your holdings list. Clicking this will typically take you to the order entry screen.
Alternative Navigation: If you're on the main trading dashboard, you can also search for the ticker symbol of the stock you wish to sell and then select "Sell."
Tip: Highlight what feels important.
Step 4: Entering Your Trade Details: Quantity and Order Type
This is where you specify how much you want to sell and how you want the trade to be executed.
Sub-heading: Specifying the Quantity to Sell
On the order entry screen, you will see a field for "Quantity" or "Number of Shares." This is where you enter the precise number of shares you want to sell, including the fractional portion.
To sell only the fractional part: Enter just the decimal amount (e.g., "0.45").
To sell a combination of whole and fractional shares: Enter the total amount (e.g., "5.25").
To sell your entire holding (including fractional): Enter the full quantity displayed.
Important Note: Merrill Edge will typically allow you to sell any quantity, including fractional amounts, down to a very small residual value. However, there might be a minimum dollar amount for selling fractional shares if you are not liquidating your entire position. It's always best to check for any specific minimums during the trade entry process.
Sub-heading: Choosing Your Order Type
This is a critical decision that impacts when and at what price your shares will be sold.
Market Order: This is the simplest option. Your shares will be sold immediately at the best available market price. While quick, the final price might fluctuate from what you see on the screen due to market volatility. Use this if you prioritize speed of execution.
Limit Order: This gives you more control. You specify a "limit price" at which you are willing to sell your shares. Your order will only execute if the stock's price reaches or exceeds your specified limit. If the price doesn't hit your limit, your order won't be filled. Use this if you want to ensure a specific minimum selling price.
Day Limit Order: The order is only active for the current trading day.
Good Till Cancelled (GTC) Limit Order: The order remains active for a set period (typically 30 calendar days on Merrill Edge) or until it's filled or you cancel it.
Considerations for Fractional Shares with Limit Orders: While Merrill Edge allows limit orders for fractional shares, keep in mind that market conditions can still impact execution. If your fractional amount is very small, rapid market movements might affect the ability to perfectly execute at your limit price, although this is less common with highly liquid stocks.
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Step 5: Reviewing Your Order
Before you hit that "Place Order" button, always, always, always review your trade details carefully! This is your last chance to catch any errors.
What to Check:
Security Symbol: Is it the correct stock?
Action: Is it "Sell"?
Quantity: Is the exact fractional (or whole + fractional) amount you intend to sell correct?
Order Type: Is it Market or Limit, and if Limit, is your price correct?
Estimated Proceeds: This will give you an idea of the cash you'll receive (before any fees).
Tip: Bookmark this post to revisit later.
Step 6: Confirming and Placing Your Order
Once you've meticulously reviewed everything and are confident in your selections, proceed to confirm and place your order. Merrill Edge might require a final confirmation step or an authorization code for security purposes.
Sub-heading: What Happens After You Place the Order
Order Confirmation: You'll receive an immediate confirmation that your order has been placed.
Order Status: You can typically track the status of your order in a "Order History" or "Order Status" section of your account.
Execution: For market orders, execution is usually almost instantaneous during market hours. For limit orders, it will execute when and if your specified price is met.
Trade Confirmation: Once the trade is executed, you'll receive a trade confirmation, usually via email or in your online documents section, detailing the actual price, quantity, and any associated fees.
Step 7: Managing Your Proceeds
After your fractional shares are sold, the proceeds will be deposited into your Merrill Edge brokerage account as cash.
Sub-heading: Accessing Your Funds
The funds from your sale will become "settled cash" after the standard settlement period (typically T+2, meaning trade date plus two business days). Once settled, you have several options:
Reinvest: Use the cash to purchase other investments within your Merrill Edge account.
Transfer to Bank of America Account: If your Merrill Edge account is linked to a Bank of America checking or savings account, you can easily transfer the funds.
Withdraw: Initiate a withdrawal via electronic transfer (ACH), wire transfer, or request a check.
Important Note: Be aware of any minimum transfer amounts or fees associated with certain withdrawal methods. ACH transfers are often free, while wire transfers may incur a fee.
Step 8: Tax Implications
Selling any investment, including fractional shares, has tax implications. When you sell, it's considered a taxable event, and you'll realize either a capital gain or a capital loss.
Sub-heading: Understanding Cost Basis
QuickTip: Read line by line if it’s complex.
Merrill Edge will typically track the cost basis of your shares. When you sell, especially if you have multiple "lots" (purchases at different times/prices), Merrill Edge often uses a "first-in, first-out" (FIFO) method by default for tax lot selection. However, you might have the option to select specific tax lots when placing your sell order, which can be beneficial for tax planning (e.g., selling higher-cost basis shares to minimize capital gains).
Consult a Tax Professional: This is not financial or tax advice. It is highly recommended to consult with a qualified tax advisor to understand the specific tax implications of selling your fractional shares and to ensure you are reporting your gains or losses correctly.
Frequently Asked Questions (FAQs)
How to check if Merrill Edge supports fractional share buying directly? As of current information, Merrill Edge primarily supports fractional shares through dividend reinvestment plans (DRIPs) and does not generally allow direct purchasing of fractional shares. You can confirm this by attempting to place a buy order for a fractional quantity; typically, the system will not allow it, or it will round up to a full share.
How to find my fractional share holdings on Merrill Edge? Log in to your Merrill Edge account, navigate to your "Portfolio" or "Holdings" section, and look for the specific security. If you see a decimal number in the "Quantity" or "Shares" column (e.g., 5.75 shares), that indicates you hold fractional shares.
How to sell only the fractional part of a stock on Merrill Edge? When placing a sell order, simply enter the decimal amount of shares you wish to sell in the "Quantity" field (e.g., "0.25"). The system will process this as a sale of only the fractional portion.
How to set a limit price when selling fractional shares on Merrill Edge? On the trade order screen, select "Limit Order" as your order type. Then, enter your desired limit price in the corresponding field. Your fractional shares will only sell if the market price reaches or exceeds your specified limit.
How to receive the proceeds after selling fractional shares on Merrill Edge? After the sale settles (usually T+2 business days), the cash proceeds will be in your Merrill Edge brokerage account. You can then choose to reinvest it, transfer it to a linked Bank of America account, or withdraw it via ACH, wire, or check.
How to avoid common mistakes when selling fractional shares? Always double-check the ticker symbol, the quantity, and the order type before confirming your trade. Ensure you understand the difference between market and limit orders and their implications for price and execution.
How to view the cost basis of my fractional shares on Merrill Edge? Merrill Edge provides tools within your account to view the cost basis of your holdings. Look for sections related to "Tax Lots," "Cost Basis," or "Tax Information" within your security details or statements.
How to handle taxes after selling fractional shares on Merrill Edge? Merrill Edge will provide you with tax documents (like Form 1099-B) detailing your sales and cost basis. It's crucial to use these documents when filing your taxes. For complex situations or specific advice, consult a qualified tax professional.
How to cancel a fractional share sell order on Merrill Edge? If your order hasn't been executed yet, you can typically cancel it from your "Order Status" or "Pending Orders" section within your Merrill Edge account. Once an order is executed, it cannot be canceled.
How to get assistance if I encounter issues selling fractional shares on Merrill Edge? If you have any trouble, Merrill Edge offers robust customer support. You can usually find their contact information (phone number, chat, or email) on their website or within the mobile app's "Help" or "Contact Us" section.
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