Minus Tick
Categories: Trading
Stocks bounce around in price from one second to the next. Even on a day that ends with shares posting notable gains, there are individual moments during the session when the stock suffers a brief dip.
These momentary drops are known as downticks, or minus ticks. (Momentary advances are called "upticks" or "plus ticks.")
Downticks used to have a special relevance, thanks to the so-called "downtick rule." That regulation stated that a trader couldn't short a stock during a downtick. To put a short in place, a trader had to wait until it was ticking higher.
The goal behind this rule, which was put in place as part of the Depression Era reform of Wall Street, was to prevent short sellers from ganging up on a stock and forcing it down unnaturally. Kind of like how, in a boxing match, a fighter has to retire to a neutral corner when the other fighter gets knocked down.
The downtick rule (or "minus tick rule," if you'd rather) was repealed in 2007, making the current market more like MMA...when the person hits the ground, jump on them and put them in a submission hold.