Thin Market


DEFINITION of 'Thin Market'

A market with a low number of buyers and sellers. Since few transactions take place in a thin market, prices are often more volatile and assets are less liquid. The low number of bids and asks will also typically result in a larger spread between the two quotes.

Also known as a "narrow market".


A thin market has high price volatility and low liquidity. If supply or demand changes abruptly, resulting in more buyers than sellers or vice versa, there will typically be a material impact on prices. Since few bids and asks are quoted, potential buyers and sellers may find it difficult to transact in a thin market.

  1. Liquidity

    The degree to which an asset or security can be quickly bought ...
  2. Buyers/Sellers On Balance

    1. A ratio based on aggregate market orders for securities that ...
  3. Deep Market

    A securities exchange, or place of commerce, where a large number ...
  4. Spread

    1. The difference between the bid and the ask price of a security ...
  5. Volatility

    1. A statistical measure of the dispersion of returns for a given ...
  6. Liquid Market

    A market with many bid and ask offers, low spreads and low volatility. ...
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