Posted in Finance, Accounting and Economics Terms, Total Reads: 190
Definition: Zero Uptick
The term ‘zero uptick’ is used for the third transaction into consideration. It is the trade transaction that happens at the exactly the same price but different volume( may be same too) like the previous trade but higher than the one before that. If we consider three transactions one after the other. Transaction 3 would be at same price as Transaction 2 but higher than Transaction 1. Transaction 3 here is Zero Uptick.
The term ‘tick’ is commonly used in the stock market with reference to the movement of the price of the stock. If the stock transaction occurs at a price higher than its previous transaction, it is called ‘uptick’, whereas if the present transaction occurs at a price lower than the previous transaction of the same stock, it is called as ‘downtick’.
If a stock was trending up and then was zero uptick, it suggests that either the growth has been hampered or the stock might fall. Hence for short sellers, they might not invest in zero uptick stock. However, this technique used by short sellers on shorting on a zero stock is not always applicable to the various investment markets, due to the different rules and regulations followed by these markets which prohibit or restrict such transactions.