ShmoopTube

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Finance allah shmoop what is thin market peahen happens when

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few stocks are trading on bonds to actually thin is

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illiquid thin is when there just aren't a lot of

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buyers at the given price levels Thin is when trading

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volumes are described by the kindly wise cnbc commentators as

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being anemic Thin is when the headlines ask where have

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all the stock buyers gone Long time passing bob dylan

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i'll go ask your parents finn is it Well not

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this guy Fat is high volumes lots of cash being

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put to work Buying securities fat is big demand to

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buy a big supply of supply Fat or liquid markets

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are generally driven by cash being put to work which

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either came from investors who simply saved their pennies to

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then deploy them in the market's taking on more risk

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by being exposed to more volatility and generally speaking hi

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liquidity even in a world where the stock market is

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flat is generally perceived as bullish or positive voting in

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the future of stock market values Yeah so what does

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all that mean Money being put to work is good

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It adds liquidity It means people are hopeful optimistic lots

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Of opinions Then goto work assessing the upside and downside

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of the market such that the gumball estimate effect is

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in place And if you didn't go to third grade

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in the last decade the gumball estimate game revolves around

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the idea that if many opinions estimate the number of

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gumballs in this big fish tank those numbers get averaged

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and way more often than not The average guesses in

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fact very close to the actual number of gumballs crushing

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down on the innocent guppies and other goldfish below The

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same holds true in the stock market where the aggregation

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of many opinions usually makes for better decisions or at

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least more accurate estimates And in the case where a

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market suddenly grows thin it means that a lot of

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educated well heeled invest astors have been spooked by the

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notion of taking on risk in their portfolios by taking

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their safe cash and risking it in the market So

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they d risk or simply then keep cash in their

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wallets Not wanting to put it to work until better 00:02:15.065 --> [endTime] signs come from you know on high

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