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Tick, Tick Size, and Tick Value

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Definition:

Financial markets move in different size price increments, and the minimum price movement is known as a tick. Futures markets often have specific tick sizes, but stock markets have a tick size of 0.01, which is the equivalent of $0.01 for US stock markets. Tick sizes and tick values are part of the contract specifications for all financial markets.

Tick Size

A market's tick size is the minimum amount that the price of the market can change. For example, the EUR futures market has a tick size of 0.0001, which means that the smallest increment that the price can move from 1.2902, would be up to 1.2903, or down to 1.2901. The tick size is also known as the minimum price change.

Tick Value

A market's tick value is the cash value of one tick (one minimum price movement). For example, the EUR futures market has a tick value of $12.50, which means that for every 0.0001 that the price moves up or down, the profit or loss of a trade would increase or decrease by $12.50. The tick value is also known as the minimum price value.

Also Known As: Minimum price change, Minimum price value
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