(November 7) – “The number of stocks that are quoted in dollars and cents, rather than in dollars and fractions, is about to jump markedly,” writes Gaston Ceron in today’s Wall Street Journal.

“The New York Stock Exchange said it will expand its “decimalization” pilot program on Dec. 4 by adding 94 stocks to the 64 securities that already trade in dollars and cents at the Big Board. The pilot is part of Wall Street’s transition to quoting stock prices in decimals, such as $10.88, instead of fractions, such as 10 7/8.”

“The pilot kicked off on Aug. 28 with 13 stocks at the NYSE and the National Association of Securities Dealers’ American Stock Exchange, and was expanded to scores of other securities on Sept. 25. The NYSE-listed stocks that trade in decimals include large, active stocks such as America Online Inc., as well as lesser-known securities. The pilot’s next phase will add stocks such as Revlon Inc. and Mattel Inc.”

“Decimalization allows stock prices to move up and down in increments as small as a penny, compared with the increment of 6.25 cents, or one-sixteenth of a dollar, that is now common for many stocks. This is expected to shrink bid-ask spreads, or the difference between the price offered to buy a stock and the price offered to sell it.”

“Industry experts say that the early evidence from the first two stages of the decimals pilot indicates that spreads have narrowed, which regulators hope will lead to investor savings.”

“The decimals pilot’s effects are being studied by the securities industry in preparation for April 9, when all stocks are to trade in decimals under a deadline set by the Securities and Exchange Commission. The NASD’s Nasdaq Stock Market is set to start its move to decimals in March.”

“A spokesman for the NYSE said the switch to decimals has been progressing ‘very smoothly’ so far.”