Price Tension

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Dictionary Says

Definition of 'Price Tension'

The phenomenon by which the seller of a particular good, service or security desires to maximize the selling price, while the buyer desires to minimize the purchasing price. Generally speaking, the greater the price tension within a particular market, the greater the bid-ask spread.
Investopedia Says

Investopedia explains 'Price Tension'

Price tension tends to decrease liquidity and create price stickiness. If price tension is relatively large within a particular market or exchange, there will be larger bid-ask spreads. Sellers will be asking for more than what the vast majority of buyers are willing to pay, which will drastically reduce the number of exchanges made within the market.

Having little liquidity in a given market exposes the investor to liquidity risk, which can result in drastic changes in the security's underlying value.

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'Price Tension'

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    ... example, gold prices experienced some of their largest recent movements during periods
    of tension with Iran and Iraq in 2007 and 2008. Its price often rises ...

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    ... Tension rising in politically hot regions of the world will have gold bugs rushing
    to ... Also, As the price of gold rises or falls it may have a dramatic effect ...

  • Traders: Profit From Other Investors' Fear

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    ... As a stock pulls back in a normal correction, tension builds among the holders of ...
    where irrational behavior has caused a stock to move to a price extreme, we ...

  • Golden Opportunity

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    ... gold has proved to be hedge against geopolitical tension and economic ... fear level
    was low and also possibly because governments worldwide manipulated the price. ...

  • Automakers Bask In Warm Glow Of February Sales

    http://stocks.investopedia.com/stock-analysis/2011/Automakers-Bask-In-Warm-Glow-Of-February-Sales-GM-F-TM-HMC-NSANY-AN0310.aspx
    ... The strength of the auto-buying consumer was apparent, as even $100 a barrel oil
    due to Mideast tension, did not hold sales back. The price of gasoline at the ...

  • Profit In The Pipeline

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    ... As I'm sure all my readers are abundantly aware, the price of oil is ... As the Associated
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  • How Much Influence Does The Fed Have?

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    ... Reserve System: Purposes and Functions, "in the short run some tension can exist ...
    face a dilemma and must decide whether to focus on defusing price pressures or ...

  • Economics Basics: What Is Economics? | Investopedia

    http://www.investopedia.com/university/economics/economics1.asp
    ... discussed in the introduction to this tutorial, refers to the tension between our ...
    shows us how individuals and firms respond to changes in price and why they ...

  • Forex Tutorial: Forex History and Market Participants ...

    http://www.investopedia.com/university/forexmarket/forex4.asp
    ... Over time, the difference in price of an ounce of gold between two currencies ... during
    the beginning of World War I. Due to the political tension with Germany ...

  • October: The Month Of Market Crashes?

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    ... In 1907, the panic nearly occurred in March and, with the tension building over ... The
    price kept rising until the Treasury broke the corner by selling $5 million ...

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