Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Downtick

What it is:

A downtick occurs when a security sells at a price less than the preceding sale. A downtick is the opposite of an uptick.

How it works (Example):

For example, if there is a trade for XYZ Company at $15.50 per share, and the next trade occurs at $15.48 per share, the XYZ shares are said to be "on a downtick ."

Why it Matters:

Several consecutive downticks indicate a bearish price trend. However, a few downticks alone are not enough information to form a solid opinion on the direction of a security. It may be only random "noise" in the security's price.