Thinly Traded Security

thinly traded security

A security that trades with little volume. Institutional investors usually exclude these securities from their portfolios because of the large price changes that would occur if trades of any significant size took place.

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Thinly Traded Security

An inactive or infrequently traded bond or stock. Thinly traded securities are usually traded in small batches, approximately five shares at a time. Thinly traded 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. Thinly traded 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.