A regulation that restricts short selling to situations where the last sale price was higher than the previous trade price (an uptick) or at the same price as the last uptick (a zero-plus tick). The rule was originally implemented as SEC Rule 10a-1 to prevent short sellers from piling on during market declines and accelerating downward momentum. The modern alternative uptick rule (Rule 201) activates a circuit breaker that restricts short selling when a stock drops 10% or more from the prior day's close.
Example
“After the stock fell 12% intraday, the alternative uptick rule was triggered, restricting short sales to prices above the national best bid for the remainder of the day.”