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Definition

Teenie

What is Teenie?

In trade, Teenie is a unit of measurement equal to one-sixteenth of a percentage point. One-hundredth of a percent is referred to as a basis point.

Understanding Teenie

A teenie was previously the smallest number that could be traded in securities and the tiniest quantity that can really alter the pricing. The Securities and Exchange Commission (SEC) required all U.S. share prices to convert from fractional to decimal pricing information in April 2001, a process known as decimalization. A teenie is defined by 0.0625 in this new structure.

With decimalization, a teenie is no anymore the basic number of securities that may be traded or the tiniest amount through which its price can vary. 0.01 cents is the minimum requirement. As a result of this development, some businessmen are now using the word "teenie" to refer to one cent. Some dealers (scalpers) use teenies in their methods, however, decimalization makes it harder to benefit from such methods because margins are often lower than 0.0625 cents.

Practical Example

Years ago, Hbl Limited used the term "teenie" to denote the lowest number that may be exchanged in stocks and the smallest possible quantity that could have a significant impact on price. One-sixteenth of a percentage point was the unit of measurement. However, the basic number of securities that can be exchanged is no longer teenie so they are updating their ways.

In Sentences

  • Teenie used to be the least unit by which a value of the underlying securities may vary before decimalization.

 

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