Tick size

The quotation jump ( also Tick, Tick Size, English:. Tick size) is the smallest possible price change in a security's price on spot or futures exchanges. The quotation jump is determined by the relevant Exchange and, by type of security and the current price vary.

Piece of Listed Securities

The quotation jump from unit-quoted securities, ie shares, warrants, rights, etc., is now usually set to the smallest available currency denomination, ie 0.01 euro (one euro cent ) to EUR - listed stock or $ 0.01 ( a penny ) to dollars - listed stock. If the market value of a piece listed security falls below a certain threshold, the listing jump is lowered. For example, the quotation jump in trading on the Frankfurt Stock Exchange when it falls below a price of 0.25 euros for cracks of 0.001 Euro ( EUR tenths cents) is lowered.

On the London Stock Exchange of the listing jump is based on a matrix dynamically set ( "dynamic tick size matrix" ). If an order for the purchase or sale of shares received, is derived from the called price with the matrix of the listing jump and validated or rejected the order accordingly. For securities which are denominated in GBP, EUR or USD, there are seven listing jumps from 0.0001 at prices less than 0.5 up to 0.1 at prices greater than 1000.

On the New York Stock Exchange ( NYSE ) ( $ 0.125 ) was recorded since 1792 in increments of eighths dollars. In June 1997, the listing jump on the NYSE on a sixteenth - dollar ( $ 0.0625 ) was halved. This decreased both the spread and the depth of trading. The NASDAQ halved in June 1997 listing the jump to sixteenth dollar. 2001 reduced the NYSE listing the jump further on a penny ( $ 0.01 ) and therefore applied for the first time since the founding of the decimal system. Presented between August 2000 and April 2001, all American stock exchanges around on Penny decimal notation. These reductions in tick size happened to order from the SEC, which thus transposed the Common Cents Stock Pricing Act of 1997, four years late. This bill became 1997 no force of law, as a decimal conversion was at the same time considered necessary for Y2K conversion as too risky.

Bonds

For securities which are quoted in percentage, ie bonds, the listing jump is set in percent. In Frankfurt, the quotation jump for fixed income securities is also generally coarser at 0.001 percent, for instruments with higher residual maturity.