What is a price tick size?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
A tick size is the smallest increment in which an order price can be set. A coarse tick concentrates the book into few levels; a fine one spreads it thin. If a limit order will not sit where you want, the tick is often the reason. Settings differ by asset and operator.
Key points
- The smallest increment for setting an order price
- A coarse tick tends to widen the spread
- A fine tick spreads liquidity across levels
- Settings differ by asset and operator
Definition
The minimum price increment at which orders can be placed in a book. Prices finer than this cannot be specified, and every level of the book falls on this grid.
Prices in a book are not continuous. Levels are laid out on a predefined grid and every order lands on one of them; that grid spacing is the tick size. Some venues vary the tick by price band.
Tick design cuts two ways. A coarse tick forces a minimum gap between the best bid and offer, so spreads cannot compress. Too fine a tick scatters orders across many thin levels, making depth hard to read.
What users actually run into is a price being refused. Enter a price off the grid and it is either rejected or silently rounded. Which of the two happens differs by venue, so checking after submission that the order sits where you meant it to is a useful habit.
Also note that the same asset looks different on a venue with a fine tick than on one with a coarse tick. When comparing books across venues, keep that difference in mind.
Watch out for
- · An off-grid price may be rounded and end up where you did not intend
- · The same asset's book looks different on venues with different ticks
- · Tick settings vary by asset and operator — check official guidance