Datek Is First To Offer Stock Trading In Decimals - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Datek Is First To Offer Stock Trading In Decimals

Datek Online Brokerage Services LLC on Monday will become the first brokerage house to offer decimal trading of Nasdaq-listed stocks. Instead of trading stocks using fractions to represent value, customers can trade a limited number of Nasdaq stocks using dollars-and-cents values.

However, the Datek offering is experimental, as the Securities and Exchange Commission isn't asking exchanges and brokerage houses to adopt decimal trading until April 9. Nasdaq, for example, is still working at getting its IT systems prepared for decimal trading. But Datek says that by allowing customers to trade in lower increments--down to a penny difference in stock prices--it can provide them with a competitive advantage.

Competing online brokerage DLJ Direct says it will offer decimal trading when the exchanges are prepared to completely phase in decimals. By introducing decimal trading before that, "the potential for consumer confusion exits," says Michael Hogan, senior VP at DLJ Direct.

E-Trade has offered decimal trading in Canada for three years, but won't extend that service to its U.S. customers until next year--primarily for the same reasons as DLJ Direct. "It would be fairly confusing to consumers to have some stocks traded in fractions and some in decimals," says Stephen Richards, E-Trade's chief online trading officer. "The best choice is to suspend decimalization until all participants are ready."

While initially it may be cumbersome to translate fraction quotes to decimal quotes, it may be an easier transition for novice investors than for professionals, says Dana Stiffler, an analyst at Meridien Research. "Retail investors have just gotten into the game of online trading, so it will not be hard for them to make the mental leap," she says.

To help its customers to better understand the process of decimal trading, Datek will host an Internet Webcast and chat session at 7 p.m. EDT July 12. Participants can register here.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Reflections on Tech in 2019
James M. Connolly, Editorial Director, InformationWeek and Network Computing,  12/9/2019
What Digital Transformation Is (And Isn't)
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/4/2019
Watch Out for New Barriers to Faster Software Development
Lisa Morgan, Freelance Writer,  12/3/2019
Register for InformationWeek Newsletters
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll