Listen to a Business English Dialogue About Plus tick
Ellie: Hi Lillian, have you ever heard of a “plus tick” in finance?
Lillian: No, what is it?
Ellie: It’s a rule that prevents short selling a stock unless the last trade before the short sale was at a higher price.
Lillian: Oh, I see. So, it’s like a way to control the market and prevent excessive downward pressure on stock prices?
Ellie: Exactly. It helps maintain stability in the market and prevents potential manipulation by short sellers.
Lillian: That sounds important for keeping the market fair for everyone involved.
Ellie: Yes, it’s one of the many regulations put in place to ensure fairness and transparency in financial markets.
Lillian: Are there any other rules similar to the plus tick?
Ellie: Well, there’s also the “uptick rule,” which is similar but applies to different situations.
Lillian: What’s the difference between the plus tick and the uptick rule?
Ellie: The uptick rule allows short selling only when the last trade before the short sale was at a higher price, regardless of whether it was the same as the last price or not.
Lillian: I see, so they’re similar in purpose but have different criteria for when short selling is allowed.
Ellie: Exactly. Both rules aim to prevent short sellers from driving down stock prices too quickly.
Lillian: Thanks for explaining, Ellie. It’s interesting to learn about these regulations in the financial world.
Ellie: No problem, Lillian. It’s important to understand how these rules shape the behavior of market participants.
