Tick Size

What is a 'Tick Size '

A tick size is the minimum price movement of a trading instrument. The price movements of different trading instruments varies. For example, if the minimum price movement of a stock is 0.01; the stock has a tick value of one cent (each tick is worth one cent for one stock). Futures markets typically have a tick size that is specific to the instrument. For example, the Russell 2000 e-mini futures contract (TF) has a tick size of .10; the value of each tick is $10.00 (each contract is worth $100 multiplied by the index).

BREAKING DOWN 'Tick Size '

The tick size of a trading instrument is its minimum price movement; in other words, it is the minimum increment in which prices can change. The tick value is what each price movement is worth in terms of dollars. A stock, for instance, has a tick size of 0.01, with a tick value of one cent. The e-mini S&P 500 contract has a tick size of .25 with a tick value of $12.50; each time price moves .25 (from 1110.50 to 1110.75 for example) the value changes $12.50, either up or down depending on the direction of the price movement.

RELATED TERMS
  1. Tick

    The minimum upward or downward movement in the price of a security. ...
  2. Tick Index

    The number of stocks trading on an uptick minus the number of ...
  3. Minus Tick

    Designates a trade that occurs at a lower price than the immediately ...
  4. Zero Minus Tick

    A securities trade executed on an exchange at the same price ...
  5. Closing Tick

    The difference between the number of stocks that closed higher ...
  6. Plus Tick

    A price designation referring to the trading of a security at ...
Related Articles
  1. Trading

    Advantages Of Data-Based Intraday Charts

    We take a look at these chart intervals and how we can use them to our advantage.
  2. Trading

    An Introduction To Trading Forex Futures

    We explain what forex futures are, where they are traded, and the tools you need to successfully trade these derivatives.
  3. Markets

    Trading The Soft Commodity Markets

    Learn the contract specifications for a few of the most heavily traded commodities.
  4. Markets

    Fueling Futures In The Energy Market

    The energy market influences every aspect of our lives, and these four options are its driving force.
  5. Trading

    Grow Your Finances In The Grain Markets

    Hedging with futures can protect those who buy and sell commodities from adverse price movements.
  6. Markets

    How Points Relate to Financial Instruments

    Points usually refer to the measurement of some change in a financial instrument’s value.
  7. Trading

    Interpreting Volume For The Futures Market

    Learn how to read the volume reports, look at the relation to liquidity and interpret volume using open interest.
  8. Trading

    How To Start Trading: Trading Plan Development

    A trading plan should including rules about how and when to place trades that includes: the markets to be traded, primary chart intervals, indicators and settings, rules for position sizing, ...
  9. Markets

    Understanding Financial Instruments

    Financial instrument is a general term used to describe a monetary asset.
  10. Markets

    A Common Base for Understanding Changes in Value

    A discussion of basis points as well as basis point calculations using Excel.
RELATED FAQS
  1. What is the difference between pips, points, and ticks?

    Learn the differences between points, ticks and pips and how each are used by investors to measure price changes in stocks, ... Read Answer >>
  2. What is a stock ticker?

    A stock ticker is a report of the price for certain securities, updated continuously throughout the trading session by the ... Read Answer >>
  3. What is the Trade Volume Index (TVI) formula and how is it calculated?

    Find out more about the trade volume index, what it measures, the formulas used for the trade volume index and how to calculate ... Read Answer >>
  4. Why is the Ease Of Movement Indicator important for traders and analysts?

    Read more about the ease of movement indicator, a technical momentum oscillator created by Richard Arms to track price changes ... Read Answer >>
  5. What types of data are necessary to make a technical analysis?

    Understand what technical analysis is, the basic theory behind employing it and what data inputs are needed to conduct it. Read Answer >>
  6. How do I use the Ease Of Movement Indicator to create a forex trading strategy?

    Discover how forex traders can apply the ease of movement indicator with currency pairs to and highlight how sensitive price ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center