Have you noticed how some stock quotes are coming in as dollars-and-cents and some are still in the old-fashioned fractions?

        If you haven't noticed, that might actually be our fault. Most media are translating the fractions (like $42í, $35 1/2, $21 3/4) to decimals for you (like $42.13, $35.50, $21.75).

        But some stocks still are trading in the old-fashioned way based on “pieces of eight.”

        That derived from when the earliest traders could actually break the Spanish milled dollar coins into eight equal pieces. (Trading in 1/16th or smaller increments is a recent development.)

        But this is the 21st, not the 18th, century, where the stock exchange traces its beginnings. We obviously don't use the Spanish currency, stable as it was back then, to trade stocks. Computers are too efficient and government regulators too investor-friendly. Hence, the U.S. Securities and Exchange Commission ordered that stock markets revolutionize a practice more than 200 years old.
       

Decimalization

        Decimalization is the practice of trading stocks in pennies rather than fractions of a dollar. No more of this 3/8 or 13/16 nonsense. You can still try to buy shares of ABC stock for $35.50 each — but you could also try to get them at $35.51 or $35.55.

        The benefit to you is that you don't have to pay $35.56 1/4, which would typically be the next increment under the old fraction system. You may save only pennies a share, but think how that would add up over thousands of shares and hundreds of trades.
       

NYSE leads the way

        The New York Stock Exchange, which traces its roots to 1792, began testing the use of decimalized stock quotes in August with just a few companies, including FedEx Corp. and Gateway Inc. A few more were added to the pilot program in September, and then 94 more in December.

        Jan. 29, the exchange began trading all 3,525 listed stocks in decimals.

        But the Nasdaq National Market hasn't made such progress.
       

Nasdaq catches up
        So when you see a dollars-and-cents quote and then one with fractions, the difference is where it's traded.

        New York Stock Exchange stocks trade in decimals. American Stock Exchange stocks trade in decimals. Nasdaq stocks still trade in fractions.

        But Nasdaq has a plan. Starting Monday, Nasdaq will start a pilot program of trading 15 stocks in decimals. Those guinea pigs include Cree Inc., Inktomi Corp. and Redback Networks Inc.

        Then, March 26, another 150 stocks will be added to the decimalized list. By April 9, all Nasdaq stocks will be trading in decimals.

        They had better be. That's the SEC-mandated deadline. It was delayed several times in 2000, after the National Association of Securities Dealers (which owns and operates Nasdaq markets) said it wasn't ready for the transition.

        But it appears to be now. So start counting those pennies.

        Amy Higgins writes about personal finance for the Enquirer. You can reach her at 768-8373; ahiggins@enquirer.com; or Your Money, The Cincinnati Enquirer, 312 Elm St., Cincinnati 45202.
       

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