Tick Test Rules

  

Categories: Trading, Regulations

1) Remove the tick...making sure the head doesn’t come off in your skin.

2) Preserve the tick in a sterile container until you get to the nearest lab.

3) Start a prophylactic course of antibiotics, just in case.

Also, the term refers to a set of rules related to when you can make certain trades on Wall Street. The ticks in question represents near-term stock price changes. A tick up represents an increase in the most recent price change; a tick down refers to a decline.

The most famous tick test rule prevented traders from shorting a stock on a downtick.

A short represents a bet that the price of a stock will decline. Regulators worried that short sellers would pile onto vulnerable stocks...sorta like pushing down the head of someone drowning in a pool. So they put in place the downtick rule, which said that a short could only be put into effect after the stock had ticked up. Basically, the person had to poke their head above water before you could push it back down.

The rule was eventually eliminated. Regulators basically decided that "drowning fools are going to drown anyway."

Related or Semi-related Video

Finance: What is Ticker Tape?2 Views

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Finance allah shmoop what is ticker tape It's this tick

00:09

tick tick you know without the explosion at the end

00:12

Okay wavy line time travel dissolve thing Go ahead Back

00:16

to nineteen twenty seven Stock information like stock prices used

00:21

to be passed along via telegraph machine This thing little

00:25

magnets were engaged electronically and the stock prices were printed

00:28

on thin paper tape known as ticker tape Yes clever

00:33

name However typically only the last numbers would be printed

00:36

Like if you had ibm training in one hundred seventy

00:39

three dollars Four cents All you would see is that

00:41

three Fifty for there on the end Well why would

00:43

this happen Well because under this technology the ink and

00:47

paper cost off fortune and because there was so much

00:50

information to convey well had they spelled out the entire

00:53

name of the company rather than the ticker symbol alone

00:56

And yes that's how the symbols all came to be

00:59

While then that printing would have taken forever just to

01:02

send over say an hour's worth of trades And by

01:05

the time the prince got done while the trades would

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be irrelevant So recycling with all this take laying around

01:10

was kind of a thing back then As well And

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old ticker tape was used for two things Parades and

01:17

well for leper con toilet paper But we don't talk

01:20

much about that anyway but more for parade People used

01:23

to throw the stuff out of building windows As you

01:25

know floats in astronauts and presidents went by Well by

01:28

the nineteen sixties the traditional ticker tape parade was no

01:32

longer needed There were better and faster ways Teo you

01:35

know throw paper and to transmit stock price info Well

01:38

today everything's done electronically Thank you The internet No more

01:41

dead trees Thank you very much So ticker tape refers

01:44

to the stream of stock prices and information that come

01:48

through a usually on a mobile device or screen of

01:51

some sort today Anyway that's progress worthy of a parade

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