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Ask A CPA - Investments & Financial Planning

Why Is Decimalization Being Implemented In The Stock Exchanges ?

The U.S. (SEC)Securities and Exchange Commission is requiring that all major U.S. Stock and Options Exchanges, as well as Nasdaq, change from fractional pricing to decimal pricing. U.S. brokerage firms will therefore be required to use decimal pricing. Decimalization pricing is expected to be beneficial for individual investors. Pricing is more easily understood in dollars and cents, which may encourage more people to buy and sell stocks and options. Decimalization pricing may also achieve savings for investors to the extent that it provides an opportunity to buy and sell stocks and options in smaller price increments per share.

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