DEFINITION of 'Tick Index'
The number of stocks trading on an uptick minus the number of stocks trading on a downtick. Tick index is a popular indicator used by day traders to view the overall market sentiment at a given point in time. By being able to easily see the ratio of "up" stocks to "down" stocks, traders can more easily make quick trading decisions that are dependent upon market movement.
BREAKING DOWN 'Tick Index'
A tick index is a very short-term indicator, often only being relevant for a few minutes, if that long. For a trader looking to enter into a bullish environment, a positive tick index is a good indicator of overall market optimism, as more stocks will be trading on an uptick compared to those trading down. That being said, tick indexes are very speculative identifiers of market sentiment at a given point in time, and are considered quite unreliable for trades that do not encompass the short time span.