Sold-Out Market

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DEFINITION of 'Sold-Out Market'

A scenario wherein all or nearly all of the remaining investors have sold their positions. Sold-out markets, as a result, contain very few traders left to sell anything, hence, the name. A sold-out market can occur for various reasons, like limited choices and/or poor liquidity.

BREAKING DOWN 'Sold-Out Market'

Generally, sold-out markets occur in the futures industry or in industries that have limited liquidity to begin with. Once a market is sold-out, no contracts are available and trading grinds to a halt. This lack of activity is similar to what one sees in over-the-counter markets from time to time, where buyers sometime struggle to find sellers and vice versa.

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RELATED FAQS
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    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
  4. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>
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