DEFINITION of ‘Teenie’
In trading, a measure of value representing one sixteenth of one point. A teenie was the smallest amount by which a security’s price could move and the smallest unit of a security that could be traded. In April 2001, the United States switched from using fractions in price quotes to using decimals – a system called “decimalization.” Under this new system, a teenie is represented by .0625.
BREAKING DOWN ‘Teenie’
With decimalization, a teenie is no longer the smallest amount by which a security’s price can move or the smallest unit of a security that can be traded. The new minimum is .01 cents. Because of this change, some traders now mean 1 cent when they use the term “teenie.” Some traders (i.e., scalpers) use teenies in their strategies, but with decimalization, such strategies can be more difficult to profit from because spreads are typically smaller than .0625 cents.