PLUS TICK Meaning and
Definition
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A "plus tick" is a term used in stock market trading to describe a transaction that occurs at a price higher than the previous transaction price. Also known as an "uptick," it represents a positive change in the value of a security. This term is particularly relevant in the context of the uptick rule, a regulation that governs short selling in the United States.
The uptick rule requires that short sales be executed on a plus tick. This means that a trader can only sell a security short if the last trade price was higher than the previous trade. The rule acts as a circuit breaker to prevent or minimize price manipulation during declining markets.
The plus tick is essential as it provides a measure of stability to the market by restricting short selling during downward price trends. It ensures that short sellers do not exacerbate market downturns by flooding the market with sell orders. By requiring short sellers to wait for a plus tick before initiating a new short position, the uptick rule aims to maintain a fair and orderly market.
In summary, a plus tick refers to a stock trade executed at a higher price than the preceding trade, indicating an upward movement in the security's value. It plays a vital role in the implementation of the uptick rule, which helps regulate short selling and promote market stability.
Common Misspellings for PLUS TICK
- olus tick
- llus tick
- -lus tick
- 0lus tick
- pkus tick
- ppus tick
- pous tick
- plys tick
- plhs tick
- pljs tick
- plis tick
- pl8s tick
- pl7s tick
- plua tick
- pluz tick
- plux tick
- plud tick
- plue tick
- pluw tick
- plus rick
Etymology of PLUS TICK
The term "plus tick" has its origins in the world of financial markets, particularly in stock trading.
The word "tick" refers to a small movement in the price of a security, typically measured in increments of one cent. In trading, the tick is used to represent the smallest possible price movement of a security.
The term "plus tick" specifically refers to a situation where a security is traded at a price higher than the previous transaction. It indicates an upward movement in price. Conversely, a "minus tick" refers to a situation where a security is traded at a lower price than the previous transaction, indicating a downward movement in price.
The origin of the word can be traced back to the concept of "ticks" in stock market reporting, where each change in the price of a security is recorded and reported as a tick.
Similar spelling words for PLUS TICK
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