Stock Market's Shift to Decimal Pricing
Gains Steam as Second
Test Phase Starts
By GASTON F. CERON
Dow Jones Newswires
NEW YORK -- The march toward trading stocks in dollars and cents
gained momentum as the second phase of a decimals pilot program
successfully got under way.
In the first phase, which began Aug. 28, only 13 stocks were
"decimalized" at the New York Stock Exchange and American Stock
Exchange, as their prices were displayed for the first time using
decimal points, such as $10.13. Monday, scores of other stocks also
ceased trading in fractions, such as 101/8, including such investor
favorites on the NYSE as America
Online Inc. and Compaq
John Panchery, a vice president at the Securities Industry
Association and manager of the trade group's decimals project, said
Wall Street had an orderly transition to the second pilot phase. His
report was echoed by the two major stock exchanges that are taking
the lead in the program. "We're not experiencing any problems," said
a spokesman for the Amex, a unit of the National Association of
Securities Dealers. "Things have been smooth," a NYSE spokesman
At the Big Board, the second pilot phase switched 57 securities
representing 52 issuing companies to decimals, and the Amex moved 46
securities representing 38 issuers. Options based on the newly
decimalized stocks also joined the conversion, while the Amex also
transferred three of its index-share products to decimals.
The next stop on Wall Street's road to decimalization will come
Nov. 1, when a stock-exchange committee will review the progress
made during the test phase. One issue sure to be discussed is the
effect decimalization is having on the industry's computer systems.
Decimalization allows stock prices
to fluctuate in increments as small as a penny, increasing the
volume of price quotations and trades.
Come Nov. 1, three alternatives are likely to be on the table,
Mr. Panchery said. One would be to "do nothing and wait for Nasdaq"
-- the NASD's Nasdaq Stock Market, which is expected to begin its
rollout of decimal quotes in March. Another choice would be to
decimalize the remaining stocks listed on the NYSE and Amex and
their accompanying options. And a third path, which in Mr.
Panchery's view is least likely, would be to switch the remaining
listed stocks' options to decimals, but hold off on the stocks
Write to Gaston F. Ceron at email@example.com