Decimalization

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Decimalization

The quotation and trading of stock or bond prices in decimals, as opposed to fractions such as eighths.

Decimalization

1. The process of changing listings of security prices from fractions to decimals. Decimalization makes prices and the market easier for investors and laypeople to understand.

2. In the United Kingdom, the process of changing the calculation of the pound sterling to a decimal system. Prior to 1971, the UK had a very complex way of calculating subdivisions of the pound. Since then, the currency has been decimalized into 100 pence.

decimalization

The transition of security prices being quoted in decimals rather than fractions. Decimalization in U.S. markets started in fall 2000 with exchange-listed stocks and was completed in April 2001 with Nasdaq stocks. Studies during the transition indicated that moving to decimals benefited investors by reducing the bid-ask spreads.
References in periodicals archive ?
Although Nova Scotia and New Brunswick had officially decimalized in 1860, in practice the lack of decimal coinage kept the Halifax pound alive until Confederation.
When compared with France, a country whose approach to accounting is generally quite close to Belgium, decimalized charts of accounts took a longer time to achieve practical application in Belgian industrial firms.
In terms of executions, customers will receive, through eVWAP, one decimalized price reflecting an Exchange calculated volume weighted average price benchmark for the day.
I decimalized time-keeping and people still say 'wait a sec.
Plans for phased-in conversion greatly increase complexity, since firms will have to maintain both decimalized and fractional pricing during the conversion period and have the capability to switch individual securities from one conversion to the other.
Current assumptions are that the Securities Industry Association (SIA), working with the Securities Exchange Commission (SEC), will phase-in standards for decimalized trading over time, initially including only exchange-traded equities and options on equities.