decimalization investment & finance definition
Quoting
stock prices in decimals (dollars and cents), as opposed to the old-style
one-eighth of a dollar increments, in order to make prices easier for investors
to understand. This also cuts down on the amount of commission that traders
receive on the large spread between prices when they are quoted in one-eighth
of a dollar increments.
See decimalization in Wall Street Words
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.