inactive security

(redirected from Inactive or Infrequently Traded Bond)

Inactive Security

An infrequently traded bond or stock. Inactive securities are usually traded in small batches, approximately five shares at a time. Inactive securities are fairly illiquid and may be difficult to sell in a downturn. Their prices are also volatile because a small change in demand can greatly affect the price. Inactive securities are sometimes called cabinet securities because they are kept in cabinets on the trading floor until they are needed. See also: Cabinet crowd, Inactive post.

inactive security

A security that has a relatively low trading volume. A particularly inactive security may not trade for days or weeks at a time, although bid and ask quotations for it are generally available. Inactive securities are often difficult to buy or sell in any significant quantity without affecting the price.
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