DEFINITION of 'Downtick'

A transaction on an exchange that occurs at a price below the previous transaction.

In order for a downtick to occur, a transaction price must be followed by a decreased transaction price. This is commonly used in reference to stocks, but it can also be extended to commodities and other forms of securities.

BREAKING DOWN 'Downtick'

For example, suppose stock ABC previously traded at $10. If its next trade occurs at a price below $10, then ABC will be on a downtick.

RELATED TERMS
  1. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash ...
  2. Reference Number

    A reference number is a unique identifier assigned to each transaction ...
  3. Closing Tick

    The difference between the number of stocks that closed higher ...
  4. Credit Card Posting

    Credit card posting occurs when a cardholder transaction has ...
  5. Hedging Transaction

    A hedging transaction is a position that an investor enters to ...
  6. Credit Netting

    Credit netting is a system where the number of credit checks ...
Related Articles
  1. Trading

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on to find out.
  2. Managing Wealth

    How Foreign Transaction Fees Work

    Using a credit card when you travel can be costly. Here's what you need to know about foreign transaction fees – plus tips on making purchases abroad.
  3. Investing

    How to Calculate Sustainable Growth Rate

    Sustainable growth rate is the rate at which a company can grow without having to borrow money to fund its growth.
  4. Tech

    Cryptocurrencies Will Fail Without Cross-Chain Transactions

    Cross-chain transactability is digital finance's only chance at becoming a relevant substitute for more traditional systems.
  5. Investing

    The Tax Consequences of Having Multiple Managers

    Having multiple firms or advisors manage your investments could result in adverse tax consequences.
  6. Investing

    What is Accounting?

    Accounting is the recording of financial transactions of a business or organization. It also includes the process of summarizing, analyzing and reporting these transactions in financial statements.
  7. Tech

    Bitcoin Trading Volume Plunges to Two-Year Low

    Even though fees are down, bitcoin trading volume is unusually sluggish. Why?
  8. Tech

    Litecoin Gains Ground On Bitcoin In The Dark Web

    Litecoin may soon surpass bitcoin as the most popular cryptocurrency for e-commerce transactions on the dark web.
  9. Investing

    Commodities trading: An overview

    Learn how even non-professional traders can participate in the commodities markets.
  10. Investing

    How Mergers and Acquisitions Can Affect A Company

    M&A can have a profound effect on a company’s growth prospects and outlook, but with a significant degree of risk.
RELATED FAQS
  1. What number of shares determines adequate liquidity for a stock?

    Learn how the liquidity of a company's shares is generally affected by bid-ask spread and trading volume of shares bought ... Read Answer >>
  2. When does vertical integration reduce transaction costs?

    Trading is not just based on supply and demand, but negotiations between companies. Vertical integration can eliminate this ... Read Answer >>
Hot Definitions
  1. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  2. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  3. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  4. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  5. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
  6. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
Trading Center