What is decimalization?
Until 2000, security prices were always provided in the form of fractions. Although it was an effective price of price, and although most investors had no difficulty in understanding the price in real dollars, it was made to standardize the prices of securities in the format of all other prices. This transformation from fractions to decimal places is called decimalization.
Although the process of decimalization seems quite simple, it is more complicated than what most of them could learn in schools to transform decimal places into fractions. Software and other applications written specifically for securities have been designed to suit fractions, not decimal means. Decimalization was therefore a process that could not run overnight. She received an order to do so on June 8, 2000 and concluded his transition to 9 April 2001. As time was transformed, Lauhunger, reigning chairman of the Securities and Stock Exchange Commission, he announced the US Congress in May 2001 that he had not caused any significant disturbancesor hardships.
The main advantages of decimalization are accurate prices, less confusion between investors and increased competition in overseas markets. In fact, Unger said recordly that almost all these things were achieved. Now, in the years since there was a ten -time, there was only a very small debate that it was the best thing for all markets.
Although some may think that it is easy to understand a system of fractions, in all cases it is not so easy. For example, almost everyone knows that the price of 25 and half would mean $ 25.50 in the US (USD). Fractions such as a quarter, half and three quarters are relatively easy. They equal $ 0.25, $ 0.50 or $ 0.75. But what about one sixth of a dollar? This can be a confusing average investor. Decimalization removes all ambiguity from the question.
Decimization also helped investors clearly mention the exact price of the shares. When prices were quoted in fractions,The smallest addition was one sixth of a dollar. Although it may seem insignificant when one buys thousands of shares of shares, even a few cents can add up to a very large number. The accuracy that naturally comes with ten -miles has not only helped investors to monitor what they were, but also helped to increase the competitiveness abroad, where the markets moved from fractions or planned to convert.