Stock Market Glossary
Tick
Smallest possible price movement of an asset.
In brief: Smallest possible price movement of an asset.
Meaning in practice
The tick size varies depending on the market and instrument (e.g. EUR 0.01 for stocks, 0.25 points for DAX futures). Together with the tick value, it determines the smallest possible profit or loss unit per contract.
Context for investors and traders
For traders, this term is most useful when preparing and executing an order. Its meaning depends on the venue, liquidity, time frame and order type. A single reading is not a reliable buy or sell decision.
How to use this in practice
Use the term first to describe the situation and add verifiable data: time frame, benchmark, costs and liquidity. Only then does it become an assessment that can be connected to an investment objective and risk budget.
What to keep in mind
Avoid false precision. Many market terms describe probabilities or historical patterns; they neither guarantee a return nor replace the review of a specific security.
