Definition of downtick

: a stock market transaction at a price below the last previous transaction in the same security — compare uptick

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History and Etymology for downtick

down entry 4 + tick entry 2

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More Definitions for downtick



Financial Definition of downtick

What It Is

A downtick occurs when a security sells at a price less than the preceding sale. A downtick is the opposite of an uptick.

How It Works

For example, if there is a trade for XYZ Company at $15.50 per share, and the next trade occurs at $15.48 per share, the XYZ shares are said to be "on a downtick ."

Why It Matters

Several consecutive downticks indicate a bearish price trend. However, a few downticks alone are not enough information to form a solid opinion on the direction of a security. It may be only random "noise" in the security's price.

Source: Investing Answers

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