What It Is:

Uptick refers to the increase in the market price of a security over the preceding transaction.

How It Works/Example:

If a new trading price for a security is higher than the preceding one (even by one cent), the security is on an uptick. For example, stock XYZ is trading for $10.00 per share. If the next time stock XYZ is traded it sells for $10.01, it has had an uptick.

An uptick is also sometimes called a plus tick.

Why It Matters:

Upticks are most important when it comes to short-selling stocks. The "uptick rule," which was in place from 1938-2007, required every short-sale transaction be entered on an uptick. This rule was instated to keep short sellers from putting unjust pressure on a stock's price, adding to a security's downward spiral.