What is a Zero Plus Tick?
Also called a zero uptick, a zero plus tick is a trade that occurs at the same price as the trade preceding it but higher than the last trade at a different price. A zero plus tick is the opposite of a zero minus tick.
How Does a Zero Plus Tick Work?
Let's say the first trade of the day for Company XYZ stock is for 1,000 shares at $20 per share. The very next trade is for 2,500 shares at $22. The third trade is for 1,500 shares at $22 (the same price) The third trade is called a zero plus tick because that $22 trade is the same price as the previous trade but higher than the last trade that occurred at a different price (the $20 trade).
Although the term is usually used in reference to stocks, it can also apply to bonds, commodities and other traded securities.
Why Does a Zero Plus Tick Matter?
A zero plus tick suggests that a stock is trending up and staying there. The SEC used to allow shorting stocks only on upticks or zero plus ticks in order to prevent traders from jumping on the bandwagon to destabilize a stock's price.