A penny for your stocks: TSE now trading in 1-cent increments
Investors in TSE-listed stocks can now buy securities that are priced in 1-cent increments, replacing the old system where senior securities could only be bought and sold in 5-cent steps.
For example, Nortel was trading at $57.41 at the noon hour on Monday. Previously, it could trade only at $57.40 or $57.45.
The move affects stocks that are priced greater than $5 a share. Stocks priced from 50 cents to $5 already trade in 1-cent increments. Stocks priced under 50 cents a share will continue to trade in half-cent increments.
The TSE says the switch-over was accomplished without incident.
The New York Stock Exchange, meanwhile, completed its switch to decimalization on Monday. All NYSE-listed stocks now trade in dollars and cents, instead of dollars and eighths of a dollar.
Supporters of decimalization say it will help investors by narrowing the "spreads", the gap between what a buyer is bidding for a stock and what a seller is asking for a stock.
All Canadian stock exchanges, including the Toronto Stock Exchange, moved to decimal trading in April 1996.
The TSE estimated that in the first year of decimalization, the savings for investors in the 35 largest TSE-listed companies amounted to $150 million.
The Nasdaq exchange is set to switch to decimal trading later this year.