What Is Tick Size?
Tick size is the minimum price increment at which an asset can trade. For BTC/USDT on most major exchanges, the tick size is $0.10, meaning the price can move in increments of $0.10 (e.g., from $60,000.10 to $60,000.20). For smaller altcoins, the tick size might be $0.0001 or even smaller to accommodate lower absolute prices.
How Tick Size Works
Tick size affects market microstructure in important ways: smaller tick sizes allow for tighter spreads (lower trading costs) but reduce the priority advantage of limit orders (since others can easily step in front by one tick). Larger tick sizes create wider minimum spreads (higher costs) but give more meaningful priority to resting limit orders.
Why It Matters for Traders
For traders, tick size matters when evaluating execution costs and when reading the order book. In assets with very small tick sizes relative to price, the spread is often only one tick, and limit orders compete purely on time priority. In assets with larger relative tick sizes, the spread may be multiple ticks wide, creating more room for limit order strategies that capture the spread.
