Uptick: Definition and Key Takeaways

An uptick is a transaction executed at a higher price than the immediately preceding trade. For most U.S. stocks trading above $1, the minimum tick size is one cent, so a move from $9.00 to $9.01 qualifies as an uptick.

Key takeaways:
Uptick = price increase of at least one cent from the prior trade.
 Downtick = price decrease of at least one cent from the prior trade.
Uptick volume measures shares traded while the price is rising and is used by traders to assess momentum.
 Historic uptick rules limited short selling to upticks; an “alternative uptick rule” was adopted in 2010 to curb extreme shorting after large one-day declines.

How an uptick works

Price changes in a security reflect willing buyers and sellers. If the last trade occurred at $9.00 and a buyer pays $9.01, that transaction is an uptick. Conversely, a sale at $8.99 is a downtick.

Tick sizes (the minimum price increment) are typically one cent for U.S. stocks over $1, though exchanges set tick sizes for other instruments (for example, futures on CME may use different increments).

Market dynamics that produce upticks:
Buyers raise their bids when they perceive value or growing demand, creating upward ticks.
 Sellers may accept lower bids when sentiment is bearish, producing downticks until buying interest returns.
* A single uptick can occur after several downticks if a buyer transacts at a price slightly higher than the last trade.

  • Zero uptick: a trade executed at the same price as the previous trade, but higher than the trade before that.
  • Uptick volume: number of shares traded while price movements are upticks.
  • Net volume: uptick volume minus downtick volume, used to help identify trending behavior.

Uptick rules and market structure

Historic uptick rule (1938–2007)
From 1938 until 2007, U.S. rules generally required short sales to be executed only on an uptick. The rule aimed to prevent short sellers from accelerating a stock’s decline by selling into falling prices.
 The rule was repealed in 2007; some commentators later pointed to the repeal as a factor in increased volatility during the 2008–2009 market crisis.

Alternative uptick rule (2010)
In February 2010 the SEC adopted an alternative mechanism: when a security falls 10% or more in one trading day, short-selling in that security is restricted to executions on an uptick for the remainder of that day and the following day.
 The intent is to temper extreme downward pressure and give market participants time to adjust.

Other rules
* Exchanges and regulators may impose additional temporary or instrument-specific restrictions to preserve orderly markets during extreme conditions.

Example

If stock ABC is trading at $15.50 and bullish news prompts buyers to transact at $15.60, that single trade from $15.50 to $15.60 is an uptick.

Uptick volume and trading signals

Uptick volume is used by technical and momentum traders to evaluate the strength of upward moves:
Rising uptick volume alongside price increases suggests buying conviction and may signal a developing uptrend.
 Comparing uptick and downtick volume (net volume) helps determine whether recent price movement is supported by trading activity.

Uptick vs. downtick

  • Uptick: current trade price > immediately prior trade price (by at least the tick size).
  • Downtick: current trade price < immediately prior trade price (by at least the tick size).

These measures are simple indicators of short-term directional pressure and are often aggregated into volume-based metrics.

Upticks in bond markets

An uptick in bond yields means yields have risen; bond prices move inversely to yields. Higher yields indicate higher prospective returns but correspond to lower bond prices.

Bottom line

An uptick is a basic price-motion concept indicating that a trade occurred at a higher price than the previous trade. Traders and regulators monitor upticks, uptick volume, and related rules because they help signal market sentiment, influence short-selling behavior, and can affect market stability during volatile periods.