Uptick Rule

In stock market terms, an uptick rule or plus tick rule is a limitation which prohibits investors from going short on a stock while the price of that stock is declining.

When an exchange is subject to an uptick rule, investors may only go short on a stock when the last movement in the stock’s price was an uptick.

Among other jurisdictions, the uptick rule is enforced in the United States by the U.S. Securities and Exchange Commission (SEC). It must be upheld by all U.S. securities exchanges. The aim of the uptick rule is to prevent short sellers from encouraging declines in stock values by short selling shares in stocks that are losing in value.

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Editor Daniel Dreier
Daniel Dreier is editor and personal finance expert at moneyland.ch.