Forex Questions and Answers - FXAnswer

SEC-imposed restrictions on when a short sale may be executed, intended to prevent investors from destabilizing the price of a stock when the market price is falling. A short sale can be made only when either 1) the sale price of the particular stock is higher than the last trade price (referred to as an uptick trade) or 2) if there is no change in the last trade price of the particular stock, the previous trade price must be higher than the trade price that preceded it (referred to as a zero uptick).

SEC-imposed restrictions on when a short sale may be executed, intended to prevent investors
from destabilizing the price of a stock when the market price is falling. A short sale can be made only when either
1) the sale price of the particular stock is higher than the last trade price (referred to as an uptick trade) or
2) if there is no change in the last trade price of the particular stock, the previous trade price must be
higher than the trade price that preceded it (referred to as a zero uptick).

Source(s):

finance-lib.com

They were the rules that were once governed on how and when a stock short sales was allowed to happen and how there were to be made. These rules were established and enforced by the Securities and Exchange Commission (SEC) thought rule 10a-1. There were two components to the tick test rules first they were in fact a short could be only be made if a price was uptick. The second part of the rule is that no short could be made if there was no change in the price assuming there had being a pervious trade was called an uptick. The SEC removed this rule on June the 6 of 2007.

Source(s):

http://www.teenanalyst.com/glossary/t/tick- testrules.html

DefinitionRules that once governed how and when stock short sales could be made, but are now no longer enforced. The tick-test rules were established by the SEC through Rule 10a-1. There were two components of the tick-test: first, that a short could only be made on a price uptick or second, that a short could be made if there was no change in price assuming the previous trade was an uptick. This rule is no longer in place, as the SEC officially removed Rule 10a-1 on June 6, 2007. The rule was originally intended to prevent investors from causing a stock to plummet when its price was already going downwards.

Source(s):

http://www.investorwords.com/7736/ tick_test_rules.html

A now defunct rule that placed restrictions on when a short sale may be executed. Tick test rules dictated that a short sale could be made only in two situations:

1. When the price of the particular stock was higher than the last trade price (an uptick).

2. When there was no change in the last trade price. The previous trade price had to be higher than the trade price that preceded it (a zero uptick or zero plus tick)

Also known as the "short sale rule".

Investopedia Says

This rule was intended to prevent investors from destabilizing a stock's price when it was falling. However, on July 6, 2007, the Securities and Exchange Commission struck Rule 10a-1, the regulation that put the uptick restrictions in place, from the books.

Source(s):

http://www.investopedia.com/terms/t/ ticktestrules.asp