The SEC has implemented a two-tiered system for the minimum price increment, or "tick size," at which stocks can be quoted. While some stocks will retain the traditional 1-cent tick, thousands of others – those with bid-ask spreads frequently hovering around 1 cent – will see their minimum price increment halved to $0.005 or sub-penny increments.This is projected to impact an estimated 1,788 stocks based on how they were traded last year, according to the SEC. A tick represents the basic unit of measurement for price movements in the market (upward or downward). It serves as a standardized way to track and compare price changes across different stocks or price differences for the same stocks on different exchanges. Because they allow for potentially more precise pricing and better market efficiency, ticks also enable traders to optimize their trading.