The minimum price increment an asset can move; also one individual price change.
Every market has a smallest allowed price step. Most US stocks above $1 tick in $0.01. The es futures contract ticks in 0.25 index points. Forex pairs tick in a pip or a fraction of one.
Ticks matter because they set the smallest possible bid-ask-spread, and in futures each tick has a fixed dollar value called the tick-value. Your profit and loss are counted in ticks before they are counted in dollars.
Example: ES moves from 5,000.00 to 5,001.00. That is four ticks. At $12.50 per tick, one contract gained $50.
Original diagrams for the ideas on this page. Illustrative, not real market data.
The bid-ask spread. Buy orders sit below, sell orders above, and the gap between the best bid (50.01) and best ask (50.04) is the spread you pay to cross. Bar length shows the size resting at each price.
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