In plain English
What Tick means
When used as a pricing unit, a tick describes one step on the price ladder. If an instrument’s minimum increment is 0.25, a move from 5,000.00 to 5,000.25 is one tick and a move to 5,000.50 is two ticks. The cash result of a one-tick move depends on contract size. Some platforms also call each refreshed bid or ask quote a tick, even if the quote did not move by the minimum increment.
Why it matters
Ticks make it possible to translate a chart or quoted price change into money. A position’s tick value depends on the product’s contract size and quoted currency, so the same one-tick movement can have very different financial effects across instruments. Tick-based calculations also help when interpreting stops, spreads, and slippage.
Example
Suppose a CFD is quoted in 0.5-point increments and pays $4 per point per contract. One tick equals 0.5 point, so one tick is worth $2 per contract. For 3 contracts, a four-tick move equals 3 × 4 × $2 = $24, before charges. This is a simplified linear example.
Quick answers
Common questions
What is the difference between a tick and tick value?+
A tick is a minimum price increment. Tick value is the monetary profit or loss caused by one tick for a specified position, determined by contract size, the number of contracts, and sometimes currency conversion.
Can “tick” mean a market-data update?+
Yes. Some platforms use it for every incoming quote update. In a contract specification, however, it commonly means the smallest allowed price fluctuation; context determines which meaning applies.
Sources