By
The Associated Press
NEW YORK - With a minimum amount of fuss, the New York Stock Exchange began trading all its stocks in decimals yesterday, the last step in a government-mandated move that has been planned for three years.
Nearly 3,400 stocks that had been traded in halves, quarters, eighths and sixteenths were switched to decimals when trading began. NYSE officials reported a smooth transition, largely because they'd already had some practice - 159 issues were traded in decimals as part of a pilot program that began last summer.
"The decimal capability is already embedded in the exchange systems," said Bob Britz, NYSE's executive vice president of marketing operations, technology and market data.
The same change occurred yesterday on the smaller American Stock Exchange, which also launched a pilot program in the summer. An estimated 1,500 stocks and options were affected there.
The Nasdaq Stock Market, home to more than 4,600 companies including Intel and Microsoft, plans to start converting its trading to decimals in March and finish the process by April 9, the deadline set by the Securities and Exchange Commission.
The SEC ordered the shift to decimals on the theory that it would make stock prices easier for investors to understand, and potentially open stock bidding and selling to more competition.
Fractions had been used to trade stocks for more than 200 years, a legacy of Spanish traders, whose currency was in increments of eighths.
In a decimal system, a stock selling for $16 3/8 a share is priced at $16.38. Shares that were priced at $10 11/16 would be listed at $10.69.
But with yesterday's change, stock prices are no longer limited to decimal equivalents of fractions. A stock can now be traded in penny increments, and have prices such as $10.17, $47.43, $52.79, etc.
For most individual investors, the adjustment to the new system should be minimal. Most newspaper tables, including those distributed by The Associated Press, converted to decimals last summer, and many brokerages have spent months preparing their customers for the change.
"Inserts about this have been put in trade confirmations since the pilot kicked off last August," said John Sommerfield, a Charles Schwab & Co. spokesman.
The NYSE spent more than a year preparing for the full switch over with technology upgrades and employee training. It also held classes for specialists, the people on the trading floor who coordinate the sales and purchases of stocks. Specialist firms have also held their own training sessions.
