Tick size is the permitted minimum increment between valid prices for a trading instrument. It determines the price grid used for orders and quotes. It does not say how far the market will move next: trades can jump across many ticks when liquidity changes.
Price increment versus money at risk
If a hypothetical instrument has a tick size of 0.5 USDT and a valid price of 100 USDT, nearby valid prices include 100.5 and 101 USDT. A limit price of 100.2 USDT does not fit that grid. The venue may reject or adjust an invalid price according to its rules.
Tick value is a different quantity: the monetary effect of one tick for the stated contract size. For a linear contract representing two underlying units, a 0.5 USDT move per unit changes one contract’s value by 1 USDT before fees. More contracts multiply that amount.
Check the relevant specification
Tick size differs from quantity step, minimum order size and minimum order value. Displayed decimal places alone are not a reliable substitute for the actual price increment.
A smaller tick allows finer price competition, but does not guarantee a narrower spread or cheaper execution. The spread can span several ticks, and slippage depends on available orders. Tick settings may vary by instrument or change through venue updates.