> These days the markets are decimalized — stocks trade in increments of a penny. (They are not allowed to trade in increments smaller than a penny, by federal

> These days the markets are decimalized — stocks trade in increments of a penny. (They are not allowed to trade in increments smaller than a penny, by federal regulation. This is unfortunate, because “the minimum spread is 0.01 dollars” is not any more rational than “the minimum spread is 0.125 dollars” — if someone is willing to provide liquidity for cheaper, we should encourage that.) This is not true, at least in the US. HFT has made sub-penny trades a pretty common thing. Quotes are displayed in pennies, but using limit orders you frequently see sub penny trades for highly liquid tickers (AAPL for example). http://blogs.reuters.com/ben-walsh/2013/11/18/do-stocks-really-trade-for-fractions-of-a-penny-sort-of/ http://blogs.reuters.com/ben-walsh/2013/11/18/do-stocks-real...