Business and Personal Finance Dictionary

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• DECIMAL PRICING
  
  US stocks and derivatives linked to stocks trade in decimals, or dollars and cents. That means that the spread between the bid and ask prices can be as small as one cent. The switch to decimal trading, which was completed in 2001, was the final stage of a conversion from trading in eighths, or increments of 12.5 cents. Trading in eighths originated in the 16th century, when North American settlers cut European coins into eight pieces to use as currency. In an intermediary phase during the 1990s, trading was handled in sixteenths, or increments of 6.25 cents.
  
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