The New York Stock Exchange kissed the pieces of eight goodbye for the last time Monday, switching trading at the exchange to increments of one penny for all of the 3,525 issues listed on the Big Board.
The conversion to trading in decimals rather than in fractions of one-eighth, something that was in the planning for years, appeared to come off without any major hitches, according to exchange officials. "It went very smoothly," NYSE spokeswoman Tanuja Kanwar said at midafternoon.
American Stock Exchange
also changed trading on its listed securities to decimal increments on Monday.
The NYSE's biggest competitor, the
, isn't scheduled to make the shift to decimal trading on its approximately 5,050 issues until March, and to complete the conversion by the April 9 deadline set by the
Securities and Exchange Commission
. Nasdaq had balked at making the conversion to decimals last year, telling federal regulators its computing systems weren't prepared to handle the dramatic increase in the volume of messages and stock quotes expected to accompany trading in one-penny increments.
The SEC and congressional proponents of decimalization have pushed the U.S. markets to drop their traditional fractional trading, in part, so they'd be up to speed with markets elsewhere in the world. For decades -- and in the case of the NYSE, more than 200 years -- the U.S. markets have traded in fractions based roughly on the old Spanish pieces of eight, increments of 1/4, 1/8 and 1/16, for example.
Supporters of the change to decimals have said the new trading increments should benefit investors by reducing the so-called "spread," or the difference between the highest price buyers offer for a stock and the lowest price sellers ask. But a preliminary
analysis of the trial trading last year showed that while the bid-ask spreads did indeed become smaller, this was offset somewhat by the fact that under decimalization there were also fewer shares available for purchase at any given price.
The NYSE and Amex began trading about 200 stock issues, and their associated options, in decimal increments on a
trial basis during the second half of last year.
"The phase-in plan, and all the other preparation by the industry, has resulted in a seamless, problem-free transition," Donald Kittell, executive vice president of the
Securities Industry Association
said in a statement after the Big Board fully converted to decimals Monday.