The Dhaka Stock Exchange (DSE) will introduce a revised tick size of Tk 0.01 for equity securities priced below Tk 1, the bourse announced on Sunday.
The move is aimed at improving price discovery and enhancing market efficiency for low-priced stocks.
Currently, DSE applies a tick size of Tk 0.10 for all equity securities to determine single price deviations in the secondary market.
As the prices of some securities have recently fallen close to Tk 1, the existing tick size has become unsuitable for trading purposes.
“Introducing a smaller tick size for securities below Tk 1 will facilitate smoother price movement and more accurate reflection of market demand and supply,” the DSE said in a statement.
The revised tick size will come into effect from October 29, in line with Regulation 18 of the Dhaka Stock Exchange Automated Trading Regulations, 1999.
The DSE urged market participants to take note of the revised tick size ahead of trading on October 29.
Ticks are the smallest price movements in the financial markets. For example, if the price of a stock moves from Tk 50.00 to Tk 50.01, that one-cent change is a tick.
In trading, ticks affect how one buys and sells securities by helping understand the smallest price change that can happen. This knowledge helps investors decide when to buy or sell.