Tick Size

Tick size is the minimum price increment in which an asset can be quoted and traded on a given venue. COMEX gold futures move in ticks of $0.10 per troy ounce, worth $10 on the standard 100-ounce contract; US stocks above $1 trade in one-cent ticks; most crypto exchanges quote bitcoin to the cent or finer.

Why it matters

Tick size is a quiet but powerful lever of market design. It sets the floor on the bid-ask spread, since quotes cannot be improved by less than one tick, and it determines the value of queue position: with a large tick, getting to the front of the line at a price level is valuable, encouraging displayed depth, while a tiny tick lets traders leapfrog each other by economically meaningless amounts, producing flickering quotes and thin displayed liquidity. Regulators experiment accordingly; the US SEC ran a multi-year tick size pilot for small-cap stocks and later moved to allow sub-penny quoting in certain names.

In percentage terms, ticks are trivial for both assets discussed here: $0.10 on gold above $2,000 an ounce and $0.01 on a six-figure bitcoin price both round to nothing, so spreads are set by competition rather than by the grid.

In the gold vs bitcoin debate

The contrast is institutional rather than numerical. Gold's price discovery happens on a few regulated venues with uniform tick rules, while bitcoin trades across dozens of exchanges with inconsistent increments and quality, leaving arbitrageurs to stitch the global price together. Consolidated, rule-bound market structure remains an area where gold's plumbing is more mature.