In financial markets, a tick size is the smallest increment (tick) by which the price of stocks, futures contracts or other exchange-traded instrument can move.
Tick sizes can be fixed (e.g., USD 0.01) or vary according to the current price (common in European markets) with larger increments at higher prices. Heavily-traded stocks are given smaller tick sizes. An instrument price is always a rational number and the tick sizes determine which numbers are permissible for a given instrument and exchange.
In Europe, Mifid has resulted in a variety of multilateral trading facilities with distinct tick size regimes for the same stocks. These differences mean that order routing systems must be aware of every MTF's tick size regime and adjust outgoing orders accordingly. There is now an industry effort underway to harmonise tick sizes.
Famous quotes containing the words tick and/or size:
“Time has an undertaking establishment on every block and drives his coffin nails faster than the steam riveters rivet or the stenographers type or the tickers tick out fours and eights and dollar signs and ciphers.”
—John Dos Passos (1896–1970)
“Crotchless trouser allows wearer to show private parts in public. Neoprene-coated nylon pack cloth is stain resistant, water repellent and tickles thighs when walking. Tan-olive shade goes with most fetishes. Adjustable straps attach to belt for good fit and easy up-down. Pant is suitable for fast exposures as well as extended engagements. One size fits all.”
—Alfred Gingold, U.S. humorist. Items From Our Catalogue, “Flasher’s Pants,” Avon Books (1982)