Why does the stock market use fractions?
Ever since the New York Stock Exchange began in 1792 with the historic Buttonwood Agreement , the United States has had a stock market. The Buttonwood Agreement was signed by 24 of our emerging country’s most prominent bankers, brokers and merchants, all with the intent to trade stocks and securities through a common clearing house. These early stockbrokers looked to Europe for a model to build their system on and decided to base it on the system of Spain. This was largely due to the fact that the U.S. dollar’s value had been based on the value of the Spanish real . The real was the Spanish silver dollar and was divided into eight parts. This evolved from the method of counting on the hands, similar to the decimal system. The difference was that the decimal system used the thumbs as part of the number while this other system used the thumbs to denote the total of the four fingers. Therefore, a person would count to four on one hand and then use the thumb to indicate a total while they
