Definition§
A Zero Plus Tick (or Zero Uptick) refers to a security trade executed at the same price as the preceding trade, but at a higher price than the last trade executed at a different price. For instance, if consecutive trades occur at $10, then $10.01, and again at $10.01, the latter is noted as a zero plus tick.
Zero Plus Tick vs. Zero Minus Tick Comparison§
| Feature | Zero Plus Tick | Zero Minus Tick |
|---|---|---|
| Price Movement | Same as previous, higher than the last different price | Same as previous, lower than the last different price |
| Direction | Indicates bullish sentiment | Indicates bearish sentiment |
| Regulatory Constraints | Governed by SEC rules on short selling | Also governed by SEC but indicates a different market action |
Example§
Imagine you are trading a stock with the following transactions:
- Trade 1: $10
- Trade 2: $10.01
- Trade 3: $10.01
Trade 3 (at $10.01) would be classified as a Zero Plus Tick since it matches the same price of Trade 2, but is higher than Trade 1.
Related Terms§
- Uptick: A trade executed at a price higher than the last traded price.
- Downtick: A sale at a price lower than the last traded price.
- Market Order: An order to buy or sell a security immediately at the best available current price.
Diagrams§
Humorous Insights§
- “Trading rules are like not stepping on a crack in the sidewalk—unless you’re doing a zero plus tick; then it’s all about stepping carefully!”
- Fun Fact: Before 2007, many traders were so tense about short selling that they wore ’tic’ tac toe patterns just to make themselves smile amid all the trading jargon!
Frequently Asked Questions§
What is a zero plus tick?§
A zero plus tick is a security trade executed at the same price as the previous trade while still being higher than the latest trade at a different price.
How are zero plus ticks useful for traders?§
They provide insight into the market’s price trends and can indicate bullish sentiment.
What is the opposite of a zero plus tick?§
The opposite is a zero minus tick, where the current trade price remains the same as the last but is lower than the last transaction priced differently.
Are zero plus ticks regulated?§
Yes, until 2007 specific SEC rules controlled the circumstances under which you could short sell during zero plus ticks.
Suggested Readings and Resources§
- Market Microstructure: Intermediaries and the Theory of Optimal Execution by Maureen O’Hara
- Flash Boys: A Wall Street Revolt by Michael Lewis
- Investopedia - Trading Terminology
Test Your Knowledge: Zero Plus Tick Quiz§
Remember, keep your trading as sharp as your pencils, and may the ticks always be positive! 🪙📈
