Most trading has been done for almost three days now amid ”Thin Market” that can be typically defined as a “period when there is a low number of buyers and sellers, they can be even only a minimum whether it is for a single stock, a whole sector, or the entire market”.
A thin market, is also known as a narrow market. Such conditions could result in considerable price volatility. Another characteristic of a thin market is the low liquidity as well. For example, there wasn’t much activity in markets on Tuesday on account of the razor thin holiday trade. UK, Canada, Australia, New Zealand, and Hong Kong markets were all closed, which added to the lighter conditions.
On Thursday, also, Wall Street closed firmed amid thin trading. Gold struggled to maintain its latest gains in thin trade as T-yields fell. The thin market conditions can be attributed to the holidays season ahead of the new year. It can also be attributed under certain circumstances to risk aversion.
Tags light trading liquidity thin market
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