Zero Plus Tick

If you think “zero plus tick” sounds kinda like “zero uptick,” then congrats, Sherlock. You’re definitely onto something here.

Zero plus tick, or zero uptick, means that a security (stocks, bonds, and what-have-you) was traded at the same price as the last time it was traded...but also that the time before that was a lower price. For example, if something was traded at $10, then later at $11, then even later at $11 again, that most recent trade (the second $11) is a zero plus tick. The “plus” means it’s more than it was before, but the “zero” means it’s the same price as last time.

The reverse? You guessed it: zero minus tick. You’re good at this.

Why do we care about zero plus tick? Well, it might have caused (or at least contributed to) the stock market crash in 1929. Some savvy investors were short selling stocks to drive down stock prices. Their goal was to make shareholders feel insecure about their securities, causing them to sell their shares at a deep discount. So the SEC was like, “not cool, guys” and made a rule that stocks could only be shorted on upticks to help stabilize the market and prevent stock market manipulation.

The SEC lifted that rule in 2007, saying “we’re in the modern ages now, we can handle it,” but then...2008 happened, and people were like “yeah, we handled it just fine…” So it came back in a new way in 2010.