An active market is characterized by frequent and high-volume transactions of assets within a particular class, providing readily available and up-to-date pricing information.
A marketplace characterized by a high volume of transactions for a security, commodity, or currency, featuring narrow bid-offer spreads and the ability to handle sizable transactions without significant price movement.
Depth of Market (DOM) refers to the number of buy and sell orders waiting to be executed for a particular asset at varied price levels, indicating the liquidity and stability of that market.
Liquidity risk refers to the potential risk that an investment cannot be liquidated during its life without significant costs or losses. This is particularly relevant in lending operations, where the ability to quickly convert an asset to cash is crucial.
Traders in financial markets who engage in high-frequency trading, dealing very frequently for small gains and may hold a position for only a few minutes.
A market participant who seeks to profit from buying and selling financial instruments, generally taking on substantial risk and adding liquidity and capital to the markets.
A thin market refers to a market for a security, commodity, currency, etc., where few transactions are occurring. Any substantial trade in such a market can have a direct and pronounced impact on prices, leading to heightened volatility.
