that once governed how and when stock
short sales could be made, but are now no longer enforced. The tick-test rules were established by the SEC through Rule 10a-1. There were two components of the tick-test: first
, that a short could only be made on a price uptick
, that a short could be made if there was no change
in price assuming the previous trade
was an uptick. This rule is no longer in place, as the SEC officially removed Rule 10a-1 on June 6, 2007. The rule was originally intended to prevent investors
from causing a stock to plummet
when its price was already going downwards.