Zero Uptick (Zero Plus Tick)

A zero uptick (or zero plus tick) is a trade executed at the same price as the immediately preceding trade, where that price is higher than the previous different-priced trade. In other words, the last two trades are at the same price, and that price is above the prior transaction at a different price.

Example:
– Sequence: $10.00 → $10.01 → $10.01.
The final $10.01 trade is a zero uptick because it matches the preceding trade but is higher than the last different price.

Zero upticks apply across traded assets but are most commonly discussed for listed equities. The opposite is a zero downtick: a trade at the same price as the previous trade but lower than the trade before that.

How it matters to short selling and market rules

Historically, regulators used uptick conditions to limit short selling that could accelerate a stock’s decline:

• 1938–2007: The SEC’s original uptick rule (Rule 10a-1) permitted short sales only on an uptick or zero uptick, not on a downtick. It aimed to reduce the potential for coordinated short selling to push prices lower.
• 2007: The SEC removed the tick test, concluding modern markets did not need it.
• 2010: After the 2008 financial crisis, the SEC adopted an alternative “circuit breaker” rule (Rule 201). If a stock drops 10% or more from its previous close during the trading day, short selling is restricted to upticks (including zero upticks) for the remainder of that day and the next trading day.

Practically, during an active uptick restriction, short sellers can only enter orders that take liquidity at the offer (i.e., when the last trade was an uptick), not by crossing the bid.

Why zero upticks matter to traders

• Short-term momentum: A zero uptick indicates buyers were willing to transact at the same higher price as the prior trade, which can suggest continued upward pressure.
• Liquidity signal: Frequent zero upticks often reflect active trading and tight bid-ask spreads; infrequent zero upticks may indicate lower liquidity and larger spreads.
• Technical analysis: Traders may use patterns of zero upticks/downticks to help identify short-term support or resistance and refine entry/exit timing.
• Short-selling strategy: Uptick patterns determine when short orders can be executed under certain regulatory constraints.

Fast fact: a string of zero upticks typically signals a liquid market with smooth price movement; a lack of zero upticks can correlate with choppier, more volatile trading.

Related definitions

• Tick: The smallest possible price change for a security (commonly $0.01 for U.S. stocks). Ticks define the minimal increment between bid and ask.
• Short selling: Borrowing shares and selling them immediately with the intent to repurchase later at a lower price, return the shares, and pocket the difference. Short sellers risk losses if the price rises.
• Technical analysis: A method of evaluating securities by analyzing past market data (price, volume) to identify patterns and forecast short-term price behavior.

Bottom line

A zero uptick is a subtle but useful price pattern denoting a trade that repeats the previous price after an earlier increase. It provides insights into short-term momentum and liquidity and has regulatory significance for short selling during periods of sharp price declines. Understanding upticks and downticks helps traders interpret microstructure signals and comply with short-sale rules when they apply.