A look back at Wall Street Journal headlines from this month in history
• 25 YEARS AGO: Decimal Stock Pricing
A quarter-century ago, in August 2000, the New York Stock Exchange and the old American Stock Exchange began shifting their pricing systems to “decimals” from fractions. At the time, it was a big deal, promising benefits by lowering costs and other innovations.
“It was a watershed moment for U.S. equity markets,” says Daryl Jones, director of research at investment analysis company Hedgeye.
Shortly before the switch, The Wall Street Journal started converting its stock listings to decimal form—starting with its Nasdaq list. (It would take several months until Nasdaq itself went decimal for trading, and the NYSE and Amex fully converted for all stocks.)
The longstanding method of U.S. stock pricing—tracing to the 17th century, in fact—used fractions such as 1/8 of 1/16. For instance, a stock priced at $10 1/16 could move up to $10 1/8. But starting in August 2000, stocks began to be priced in increments of 1 cent, which could allow a price of $10.01 or $10.02, etc. READ more here.
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