For years, I have been an advocate of decimal pricing. Recently, the regulators and the industry have agreed to permit decimal pricing as quickly as possible. Of course, they had to. Many stock exchanges like the Toronto Exchange were already trading in decimal prices. Interestingly enough, the empirical evidence proved that Nasdaq stocks, which were cross-traded on the Toronto Exchange in decimals, were cheaper in Canada than they were in the U.S. markets. Decimal pricing on Nasdaq and the exchanges will reduce the risk of overcoming the spread to DAET traders. Traders have to beat the spread in order to make a profit. It helps if the spread is in pennies instead of higher fractions of a dollar. Traders and investors are buying the underlying volatility of a stock and want to pay as little as possible for the spread.
Rules For Success
Go home flat, no worries.
Learn to cut losses.
Ride your profits.
Position yourself to profit on downward movements of securities.
