Dictionary of Finance and Investment Terms: trading variation
trading variation
increments in which securities transaction prices are rounded. For example, stocks are rounded up or down to the nearest eighth of a point. Over the next several years, though, decimal trading, in which stock prices are quoted in decimals, will gradually replace quotations in eighths. Options over $3 are also rounded to an eighth, but options under $3 are rounded to 1/16. Corporate and municipal bonds are rounded to 1/8, medium- and long-term government notes and bonds to 1/32, and shorter-term government bonds to 1/64.
