Tick Size
The smallest price increment by which a security's quote may change on an exchange.
Formula
Test: every valid order price must be an exact multiple of the tick size for that security
Unit
₹
In depth
Tick size sets a floor under the bid-ask spread, and therefore under the cost of round-tripping a position — a strategy targeting less than one tick of movement cannot be profitable at all. Indian equities generally trade in ₹0.05 ticks, with finer increments for some low-priced and derivative instruments. A tick that is too coarse makes spreads artificially wide; one that is too fine encourages excessive quote flickering and lets tiny orders jump the queue cheaply. In percentage terms a fixed tick is far more costly for a low-priced stock than for a high-priced one.
Worked example
A ₹0.05 tick on a ₹20 share is 0.25% per tick; on a ₹2,000 share it is 0.0025%. The same rule imposes a hundred times the relative friction on the cheaper stock.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Tick Size” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.