Zero Minus Tick

DEFINITION of 'Zero Minus Tick'

A securities trade executed on an exchange at the same price as the preceding trade, but at a lower price than the last trade of a different price. For example, if a succession of trades occur in the following order - $10.25, $10.00, and $10.00 - the last trade would be considered a zero minus tick or zero downtick trade.

BREAKING DOWN 'Zero Minus Tick'

Until 2007, Securities And Exchange Commission (SEC) regulations prohibited against selling a stock short on a down tick or a zero minus tick. As a result potential short sales would have to pass a tick test to make sure that the stock was trading up or flat before the short sale could go through. The restriction was eliminated after the SEC concluded that U.S. markets functioned orderly enough that excessive short sales would not artificially drive down prices. The advent of decimalization also helped the rule get lifted because it reduced the average size of a tick move from fractions to pennies.

RELATED TERMS
  1. Plus Tick

    A price designation referring to the trading of a security at ...
  2. Tick

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

    The number of stocks trading on an uptick minus the number of ...
  4. Tick Size

    The minimum price movement of a trading instrument. The price ...
  5. Tick Test Rules

    A now defunct rule that placed restrictions on when a short sale ...
  6. Short-Sale Rule

    A Securities and Exchange Commission (SEC) trading regulation ...
Related Articles
  1. Trading

    Why Is Short Selling Legal? A Brief History

    Short selling -- selling borrowed stock in hopes the price goes down -- was unregulated until the Great Depression.
  2. Trading

    Advantages Of Data-Based Intraday Charts

    We take a look at these chart intervals and how we can use them to our advantage.
  3. 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.
  4. Investing

    Is The Series 24 Exam Hard?

    What makes the series 24 so challenging? The exam focuses very heavily on the supervision of trading and market making and the supervision of investment banking.
  5. Trading

    Beginner's Guide To E-Mini Futures Contracts: E-Mini Specifications

    Each e-mini contract has certain specifications as outlined by its host exchange. Ticker SymbolEach contract has a ticker symbol, or an arrangement of letters representing the specific contract. ...
  6. Trading

    Four Commonly Used Indicators In Trend Trading

    No single indicator can punch a ticket to market riches, but here are four that remain popular among trend traders.
  7. Markets

    Short Sales For Market Downturns

    This strategy can help in market downturns, but it's not for inexperienced traders.
  8. Markets

    Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  9. Investing

    Short Selling: Why Short?

    Generally, the two main reasons to short are to either speculate or to hedge. When you speculate, you are watching for fluctuations in the market in order to quickly make a big profit off of ...
  10. Trading

    Online Stock Traders

    Online stock traders place buy/sell orders for financial securities and/or currencies with the use of a brokerage's Internet-based proprietary trading platforms. The use of online trading ...
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 are the regulations surrounding limit order protection?

    Learn about the order protection rule enacted by the Securities and Exchange Commission (SEC) to ensure investors receive ... 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. I don't understand how a stock has a trading price of 5.97, but when I buy it I have ...

    It might seem logical that the last traded price of a security is the price at which it would currently be trading, but this ... Read Answer >>
  5. What is the downtick-uptick rule on the NYSE?

    To ensure orderly markets, the New York Stock Exchange (NYSE) has a set of restrictions that it can implement when experiencing ... Read Answer >>
  6. 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 >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center