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Tick [Securities]: A Comprehensive Guide to Price Fluctuations
Definition & meaning
A tick in securities refers to the smallest possible change in the price of a security, which can occur either upward or downward. There are three main types of ticks:
Up-tick (plus tick): This indicates that the last trade price was higher than the previous trade price.
Down-tick (minus tick): This indicates that the last trade price was lower than the previous trade price.
Zero tick: This occurs when the last trade price remains the same as the one before it.
Table of content
Legal use & context
The term "tick" is primarily used in the context of trading securities. It is relevant in financial and securities law, particularly in transactions involving stocks, bonds, and other financial instruments. Understanding ticks is essential for traders and investors, as they can influence trading strategies and market analysis. Users can manage their trading activities and related documentation through legal templates available at US Legal Forms.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: If a stock's last trade was at $50 and the previous trade was at $49.50, this would be classified as an up-tick.
Example 2: If the last trade was at $48 and the previous trade was at $48.50, this would be classified as a down-tick.
Comparison with related terms
Term
Definition
Difference
Up-tick
Last trade price is higher than the previous price.
Specifically indicates a price increase.
Down-tick
Last trade price is lower than the previous price.
Specifically indicates a price decrease.
Zero tick
Last trade price is the same as the previous price.
Indicates no change in price.
Common misunderstandings
What to do if this term applies to you
If you are involved in trading securities, it's important to understand how ticks affect your transactions. You can explore US Legal Forms for templates that help you manage your trading documentation effectively. If you face complex issues related to trading or securities, consider seeking advice from a legal professional.
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