When people talk about the stock market, you often hear terms like tick size or tick rate. These may sound technical, but once you break them down, they’re actually simple to understand. Let’s go step by step and learn what a tick really means in trading, especially in the Indian context.
1. What is Tick in Trading?
A tick in trading refers to the minimum possible price movement of a stock, index, or derivative.
For example:
If a stock is trading at ₹100, and the minimum change allowed in its price is ₹0.05, then the “tick” is ₹0.05.
So, the price can move from ₹100 to ₹100.05 or ₹99.95, but not to ₹100.02.
In simple words, a tick is the smallest “step” by which the price of a financial instrument can go up or down.
2. How Much is a Tick in Stocks?
The value of a tick depends on the exchange and the financial instrument you’re trading.
In most stock markets, including India, 1 tick = ₹0.05 for equities.
That means, if you buy 100 shares of a stock, a one-tick movement (₹0.05) will change your position’s value by ₹5 (100 shares × ₹0.05).
For derivatives like futures and options, the tick value is calculated as:
Tick Value = Tick Size × Lot Size
So, if Nifty Futures has a tick size of ₹0.05 and a lot size of 50, then: Tick Value = 0.05 × 50 = ₹2.5 per tick.
3. What is a Good Tick Rate?
The tick rate usually refers to how frequently price updates are received on a trading platform or in market data feeds.
A good tick rate means you are getting real-time, accurate, and fast price updates.
In active markets, where prices change quickly, a higher tick rate helps traders react without delays.
For retail traders, most brokers in India already provide sufficient tick rate for normal trading. Professional traders and institutions may pay for faster, premium data feeds to get even better tick rates.
4. What is Tick Size in NSE?
In the National Stock Exchange (NSE) of India:
The tick size is ₹0.05 for most equity shares and equity derivatives.
For currency derivatives, the tick size is usually 0.0025 (25 paisa for every unit of currency pair).
For interest rate futures, the tick size is 0.25 paise (₹0.0025).
This means every order you place must align with this minimum price movement. You cannot place an order in between these fixed steps.
5. What is Tick to Trade?
Tick-to-trade is a concept used in high-frequency trading (HFT). It refers to the time it takes for a trading system to process a tick (price update) and place a trade based on it.
In simple terms, it measures the speed of execution.
A lower tick-to-trade time means the system is super fast in reacting to price changes, which is very important for algorithmic and high-frequency traders.
For regular investors, tick-to-trade doesn’t matter much. But for professional traders using advanced systems, even microseconds can make a huge difference.
Final Thoughts
A tick might seem like a small thing, but in trading, it plays a big role in defining how prices move and how trades are executed.
A tick is simply the smallest price movement allowed.
In Indian stock markets, the standard tick size is ₹0.05.
A good tick rate ensures timely price updates, while tick-to-trade measures execution speed in professional trading systems.
For everyday traders, understanding ticks helps in calculating profits, losses, and order placement more precisely. And if you’re aiming for advanced trading, tick-related concepts become even more important.
