downtick

A downtick is a term used in finance and trading to describe a stock or other security whose price has just fallen. More specifically, a downtick occurs when the last trade of a security was at a lower price than the previous trade. This is often contrasted with an uptick, where the price has just risen. In the context of market regulation, the term can also refer to the "uptick rule," which historically prohibited short selling unless the stock's price was rising or at least stable. This rule was designed to curb excessive short selling and prevent rapid price declines. While the strict uptick rule has been modified or repealed in many markets, the concept of a downtick remains relevant for understanding price movements and market sentiment. Traders and analysts monitor downticks to gauge selling pressure and potential short-term price trends. A sustained series of downticks can indicate increasing bearish sentiment in the market for that particular security.