For stocks trading above $1, what is the minimum increment for trading?

For stocks trading above $1, what is the minimum increment for trading?

• A. 0.05
• B. 0.10
• C. 0.01
• D. 0.50

Answer: (C)

For stocks trading above $1, the minimum increment for trading is set at $0.01. This means that price changes can occur in one-cent increments, allowing for greater price precision and more granular trading opportunities in the market. This rule is established by the Financial Industry Regulatory Authority (FINRA) to facilitate liquidity and keep the market efficient. The adoption of a minimum increment of $0.01 for stocks priced over $1 reflects a standardization in trading practices that enables investors to buy and sell shares in smaller price changes, which is particularly important in a dynamic market environment.

For stocks trading above $1, the minimum increment for trading is set at $0.01. This means that price changes can occur in one-cent increments, allowing for greater price precision and more granular trading opportunities in the market. This rule is established by the Financial Industry Regulatory Authority (FINRA) to facilitate liquidity and keep the market efficient. The adoption of a minimum increment of $0.01 for stocks priced over $1 reflects a standardization in trading practices that enables investors to buy and sell shares in smaller price changes, which is particularly important in a dynamic market environment.