UPTICK RULE
The Uptick Rule was a prior rule implemented by the Securities and Exchange Commission which states that every short sale transaction must be entered at a price that is more than the previous trade’s price. It is also referred to as the ‘plus tick rule’. It was established in the Securities Exchange Act of 1934 as Rule 10a-1 and was carried out in the year 1938. The rule prohibits the addition to the downward momentum by short sellers during a time when an asset’s price is already in steep declines.
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