Illiquid Market

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Illiquid Market

A market in which that is difficult to sell assets because of their expense, lack of interested buyers, or some other reason. Examples of illiquid markets include real estate, some stocks with low trading volume, or collectibles. Assets in illiquid markets still have value and, in many cases, very high value, but are simply difficult to sell. See also: Liquid.
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References in periodicals archive ?
Its proprietary 'price dragging' technique minimizes price distortions for traders in volatile and illiquid markets by insulating the index from erratic movements in the bid-ask spread of constituent options.
In illiquid markets, where assets cannot easily be sold for cash, the fall can be brutal.
For illiquid markets, it is logical to use the cost model.
"And ultimately how much political sovereignty is sacrificed, and what is the risk to completion of projects in the event of a disorderly slowdown in the domestic Chinese economy," said the US investment firm specialising in frontier and illiquid markets.
Poorly developed capital markets, illiquid markets, and rel- atively high interest rates for local loans are some of the challenges af- fecting project developers' efforts to raise finance locally.
This happens more often in volatile markets, illiquid markets and/or between opening and closing times.
This applies to liquid and illiquid markets. Odds are that we are in for a five- to 10-year period of a "Warren Buffett market," with lower GDP results, lower equity returns and greater dispersion.
Directors noted the challenges in collateral valuation and their weak loss absorption capacity in the context of illiquid markets. Therefore, Directors recommended a gradual increase in provisioning to fully cover all loan losses, secured and unsecured.
The stratospheric levels of leverage in the debt markets and Dodd Frank/Volcker Rule related fall in bank capital dedicated to market making means that the spike in the US Treasury bond yields could become chaotic in illiquid markets. A sell off in bond markets could easily lead a fall in the S&P 500 to the 1840 - 1860 level, an optimal reentry price.
Some parties have strong opinion that fair value accounting has a major contribution in strengthen credit crises, specially pointing to the obvious difficulties of measuring the fair values of subprime positions in the current illiquid markets and the feedback effects noted above.
Prior to the April 9, 2009 announcement, investors may have been concerned about the volatility of earnings and the ability of banks to meet their capital requirements due to asset write downs on assets that have temporarily illiquid markets.