Tick definition

A tick is the smallest price increment by which an instrument can move. Tick size sets the minimum change allowed in a quote, and tick value is what one tick is worth in money.

Tick size varies by market and instrument. A share might move in steps of USD 0.01, while a futures contract might have a tick of 0.25 index points or USD 0.01 per barrel, set by the exchange specification. You use tick size and tick value together to work out price movement, cost, and profit or loss per contract.

A tick is not the same as a pip or a point. A pip is a fixed forex unit, normally the fourth decimal of a pair at 0.0001 or the second decimal on yen pairs. A point usually means a one-unit move in an index or a whole-number step in a price. A tick is whatever minimum step the exchange sets for that specific instrument, so its size depends on the contract rather than a fixed convention.