Zero Minus Tick

AAA

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.

INVESTOPEDIA EXPLAINS '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. Short Selling

    The sale of a security that is not owned by the seller, or that ...
  2. Short Squeeze

    A situation in which a heavily shorted stock or commodity moves ...
  3. Zero Plus Tick

    A security trade that is executed at the same price as the preceding ...
  4. Decimalization

    A system where security prices are quoted using a decimal format ...
  5. Tick

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

    The number of stocks trading on an uptick minus the number of ...
Related Articles
  1. Active Trading Fundamentals

    When To Short A Stock

  2. Options & Futures

    Using The VIX For Shorting Opportunities

  3. Active Trading Fundamentals

    Can you short sell stocks that are trading ...

  4. Active Trading Fundamentals

    Why do you need a margin account to ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center