Uptick rule
The uptick rule is an rule restricting short in a that has already fallen sharply, aimed at preventing from piling onto a decline and accelerating it further. Under the current version of the rule, once a falls a significant percentage in a single day, short in that are only allowed at a price above the current best bid for the rest of that day and the following day, rather than at any available price.
The original uptick rule, in place for decades before being removed in the mid-2000s, required every short sale to happen on an uptick, a price higher than the last trade, at all times regardless of how the was performing. That version was eliminated after regulators concluded it was not clearly effective and was becoming increasingly difficult to enforce as trading moved across many venues at high speed. The current rule was introduced afterward as a narrower, style version that only kicks in once a has already dropped sharply, rather than applying to every short sale at all times.
The rule reflects a long standing concern that unrestricted during a rapid decline could add its own selling pressure on top of whatever caused the drop in the first place, worsening a 's fall beyond what its underlying situation would justify. Critics have long debated how much the rule actually changes trading behavior in practice, but it remains part of the standard toolkit exchanges use, alongside and , to manage disorderly, fast moving declines in individual .