Stocks traded in eighths of a point until the 2000s, when stock exchanges such as the New York Stock Exchange and American Stock Exchange switched to decimal pricing. A Wall Street saying was that there was nothing a trader wouldn’t do for that eighth of a point—cut your heart out, sell his own brother, sell his own mother, etc.
Why Are Stocks Traded in Eighths?
By Tim Plaehn, eHow Contributing Writer
The first coins accepted as a U.S. dollar were the Spanish silver eight-real coins, or “pieces of eight.” The coins were often cut into eighths to make change. The eighths, or “bits,” were commonly used until the Spanish coin stopped being legal currency in the U.S. in 1857. Formal stock markets started in the U.S. in the late 1700s and the eighth of a dollar was the smallest currency of the time.
The eighth remained the minimum price differential in stocks until 1997 when the New York Stock Exchange switched to an sixteenth spread. In 2000 Congress and the Securities and Exchange commission mandated a change to decimal pricing and in February 2001 the NYSE and American Stock Exchange switched to decimal trading. NASDAQ completed the transition in April of 2001.
Google News Archive
31 January 1982, Pittsburgh (PA) Press, “What You Can Learn From Big Investors” by Lewis H. Lapham, pg. 13, cols. 1-2:
Money was going after money, and on the floor of the New York Stock Exchange it was said that for an eighth of a point, a man would sell his own brother.
13 May 1986, Philadelphia (PA) Daily News, business, pg. 27:
“In this business a friend is your friend for an eighth of a point.”
A field guide to the 400 leading companies in America
By Milton Moskowitz, Robert Levering and Michael Katz
New York, NY: Doubleday/Currency
They’re still regarded primarily as traders who will cut your heart out for an eighth of a point.
11 May 1990, St. Louis (MO) Post-Dispatch, “Japanese Bankers Target St. Louis,” pg. 1E:
The Japanese, with their cut-rate pricing, are more likely to go after America’s really big companies, ‘’where the corporate treasurer would just about kill his mother for an eighth of a point,’’ Baur said.
Jesse’s Cafe Americain
04 February 2010
Taleb: US Treasuries a ‘No-Brainer’ Short
Everything is relative, and the US banks will throw their relatives, their European cousins, under the bus if it is required to save their bonuses. The saying “he would sell his mother for an eighth” is a Wall Street proverb.
New York City • Banking/Finance/Insurance • (0) Comments • Friday, April 02, 2010 • Permalink