What is a tick in Stock Market?

LAGPAT NAGAR, India - May 17, 2020 - PRLog -- A tick represents the variation between 2 consecutive prices. It does not represent a unit of time but a change in price due to a transaction made on the instrument. This variation can be upward or downward.

Trading on a tick chart

The tick chart is completely different from a chart in time units.

A graph with a time unit groups together all the ticks that have occurred in a certain period of time. There can be a multitude if the asset is very liquid or zero if no transaction has been made during the time unit.

A tick chart does not take into account a unit of time . It simply records the transactions made on the instrument. The time interval between 2 ticks is not constant. A defined number of ticks may have taken place in seconds or hours.

On a tick chart, it is possible to choose the number of transactions carried out (10,100,500 ...).

Tick ​​size

The size of a tick is variable depending on the instrument treated. It is a function of the dimensioning step . On the future CAC 40, the quotation step is 0.5 (for example the CAC dimension 5500 / 5500.50). The size of the tick cannot be less than the quotation step, it is the minimum possible variation on the instrument.

However, the tick may be higher than the quotation step. This is the case if the spread is larger than the quotation step and a transaction is made. The tick is then equivalent to the spread.


Tick ​​value = Tick size * Size of a standard contract * Size of your position

Depending on the market in which the instrument is located, the position size is defined with different terms (lots, contracts ...).

Let us take several examples of calculating the value of the tick:


On EUR / USD: The size of a lot is 100,000 units. With EUR / USD quoting in 4 decimal places, the tick size is 0.0001 USD. If you trade 0.1 lot, the tick value is then 0.0001 * 100,000 * 0.1 = 1USD

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