Zero uptick can be defined as a trade executed at the same price as the trade just before it, but at a price higher than the trade preceding that.
For instance, if equities are purchased and sold at $58, trailed by $59 and $59, the last transaction at $59 is viewed as to be a zero uptick.
This difference can be significant for short sellers attempting to abstain from shorting an rising security.
Otherwise referred to as a zero-plus tick, the method of shorting on a zero uptick is not appropriate for all investment markets, because of the various standards and guidelines forbidding or confining such trades.
The Forex of foreign exchange market, which has constrained limitations on shorting, is among the markets in which the method of shorting is more well known.
The Uptick Rule ( otherwise referred to as the "plus tick rule") is a former rule set up by the Securities and Exchange Commission or the SEC that requires each short sale trade to be entered at a higher price than the preceding transaction.
This standard was presented in the Securities Exchange Act of 1934 as Rule 10a-1 and actualized in the year 1938.
It keeps short sellers from contributing to the downward momentum of a security already experiencing heavy decreases.