Tick Size
Updated: Oct 29, 2018
What is a 'Tick'
A tick Is a measure of the minimum upward or downward movement In the price of a security. A tick can also refer to the change in the price of a security from trade to trade. Since 2001,with the advent of decimalization,the minimum tick size for stocks trading above Sl is 1 cent.
Examples of Tick Size by Market
Investments may have different potential tick sizes depending on the market in which they participate. For example,the E-mini S&P 500 futures contract has a designated tick size of S0.25 while gold futures have a tick size of So.10.
Price Movement Restrictions based on Tick Size
If a futures contract on the E-mini S&P 500 is currently listed at a price of $20, it can move one tick upward, changing the price to $20.25 based on the $0.25 tick size minimum.However,with that minimum tick size In place, the ones of the security could not move from $20 to S20.10 as So.10 Is below the minimum.