Trading in Decimals Begins With No Problems

The New York and American stock exchanges dipped their toes into the brave new world of decimals Monday, beginning trading on 13 stocks in increments of one penny instead of fractions based on an eighth of a dollar.

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Officials reported no technical difficulties in trading the stocks. The move is part of a planned shift of all trading of stocks and options on U.S. markets to decimals by next April.

"Everybody's trading okay," said John Panchery, vice president and decimalization project manager at the Securities Industry Association, which represents brokerage firms. "That's attributable to the fact that we've been testing for several months now."

The New York Stock Exchange reported smooth trading on the seven stocks it converted to decimals. Those included Anadarko Petroleum (APC), FedEx (FDX) and Gateway (GTW). (TSC wrote a story Friday about the stocks involved.)

Shares traded on the American Stock Exchange in decimals Monday included eMagin (EMA), Media General (MEG.A) and ON2.com(ONT).

The Nasdaq Stock Market isn't scheduled to begin converting trading of its stocks to decimals until next year.

Panchery at the SIA said Monday's limited trading change was designed to test the infrastructure needed for the full conversion to decimals. A better test of whether trading in one-cent increments influences things like volume and the size of price movements on stocks will occur in late September when as many as 100 additional stocks are converted to decimal trading, he said.

Supporters of the shift to decimals have said the conversion could lead to smaller spreads between what sellers ask and buyers bid for stocks.

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