Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Zero Uptick

What it is:

Also called a zero plus tick, a zero uptick is a trade that occurs at the same price as the trade preceding it but higher than the last trade at a different price. A zero uptick is the opposite of a zero minus tick.

How it works (Example):

Let's say the first trade of the day for Company XYZ stock is for 1,000 shares at $20 per share. The next trade is for 2,500 shares at $22. The third trade is for 1,500 shares at $22 (the same price). The third trade is called a zero uptick because that $22 trade is the same price as the previous trade but higher than the last trade that occurred at a different price (the $20 trade).

Although the term is usually used in reference to stocks, it can also apply to bonds, commodities and other traded securities.

Why it Matters:

A zero uptick suggests that a stock is trending up and staying there. The SEC used to allow shorting stocks only on upticks or zero upticks in order to prevent traders from jumping on the bandwagon to destabilize a stock's price.