Fractional Trading 101 with Apex Chief Product Officer Dustin Kirkland
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2020 was a year that left no industry untouched, permanently changing the landscape for many businesses. In the investing world, 2020 was the year day-trading, retail investing, and fractional trading exploded, with retail traders making up 20% of US Equities Volume (up from 16% in 2019).
Though everyone is familiar with fractional trading, what really happens after you hit Buy on that half-share order of Shopify stock?
Fractional trading is one of the hottest product features in Fintech, democratizing investor access to expensive shares like Amazon, Berkshire A, and Chipotle. In addition, they allow more precise and comfortable investing and budgeting, as people can designate a notional dollar amount toward a purchase.
But how exactly do you buy .3 of a share?
Enter Apex Clearing, a PEAK6 company, one of the most innovative and digital-first clearing and custody platforms in the world. Apex powers the fractional capabilities of many companies you may use today, including Stash, M1 Finance, broker-dealers, major banks, and RIAs. They also powered Robinhood up until recently.
In today’s episode, I sat down with Apex’s Chief Product Officer, Dustin Kirkland, to learn about:
- Dustin’s unusual path to FinTech
- What exactly Apex does (8:00)
- The basics of clearing & custody (9:00)
- Clearing & market making (11:00)
- The fascinating way Apex handles fractional trading (15:05)
- How crypto trading will disrupt equities (20:18)
- And a rapid-fire round including the best Austin BBQ and some shared love for the Grateful Dead
About Apex
Apex Clearing is a custody and clearing engine that’s powering the future of digital wealth management. Our proprietary enterprise-grade technology delivers speed, efficiency and flexibility to firms ranging from innovative start-ups to blue-chip brands focused on transformation to capture a new generation of investors. We help our clients provide the seamless digital experiences today’s consumers expect with the throughput and scalability needed by fast-growing, high-volume financial services businesses. Founded in 2012, Apex Clearing is registered with the SEC, a member of FINRA and a Participant in SIPC.
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Ryan Zauk
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Ryan Zauk is an MBA Candidate at The Wharton School, where he runs the Wharton FinTech Podcast. He currently works with the US International Development Finance Corp looking at tech impact investments in developing markets. After graduation, Ryan will join Morgan Stanley’s Menlo Park Office working with the world’s largest technology companies. He has a passion for music, media, and all things FinTech.
You can reach him at rzauk@wharton.upenn.edu or on Twitter.
