Tick tests was the name given to a method that was once employed in order to determine when circumstances were right for the execution of a short sale. To a great extent, this type of testing method was focused mainly on the use within those markets that were based in the United States. During the decade of the 1930’s the tick test approach was first developed and employed , but is now considered obsolete.
Two conditions under which tick test provides for a short sale
Essentially, there were two conditions under which tick test provides for a short sale.
First Condition
First was that, the sale could take place in an uptick situation. That is, a short sale would be allowed when the current price of a given stock was higher than the last trading prices for the same stock.
