Liquidity risk. Liquidity risk is the inability to buy or sell an investment at the desired time, or to transact in an instrument at all. When a delay occurs, such delay may affect the price at which such asset can actually be bought or sold. Also, instruments that are illiquid or that trade in lower volumes may be more difficult to value or to obtain reliable information about their value. Liquidity risk is linked to a variety of factors such as: • The particular terms and conditions of an instrument; • The fact that the instrument is not publicly traded or listed on an exchange; • Adversely perceived market developments; • The fact that the ownership of an investment is highly concentrated in one or small number of investors; • A reduced number of financial institutions operating as market maker in the relevant financial instruments. For example, in the case of securitised derivatives (such as structured products), the only market maker might be the issuer itself (or an affiliated entity), who might provide a limited undertaking to act as market maker; • The fact that market participants may attempt to sell holdings at the same time as the investor, and there may be insufficient liquidity to accommodate these sales. These factors may exist at the time of investment or may arise subsequently.
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Samples: Notice of Execution and Clearing Agreement, www.fxflat.com, www.lynxbroker.de
Liquidity risk. Liquidity risk is the inability to buy or sell an investment at the desired time, or to transact in an instrument at all. When a delay occurs, such delay may affect the price at which such asset can actually be bought or sold. Also, instruments that are illiquid or that trade in lower volumes may be more difficult to value or to obtain reliable information about their value. Liquidity risk is linked to a variety of factors such as: • The the particular terms and conditions of an instrument; • The the fact that the instrument is not publicly traded or listed on an exchange; • Adversely adversely perceived market developments; • The the fact that the ownership of an investment is highly concentrated in one or small number of investors; • A a reduced number of financial institutions operating as market maker in the relevant financial instruments. For example, in the case of securitised derivatives (such as structured products), the only market maker might be the issuer itself (or an affiliated entity), who might provide a limited undertaking to act as market maker; • The the fact that market participants may attempt to sell holdings at the same time as the investor, and there may be insufficient liquidity to accommodate these sales. These factors may exist at the time of investment or may arise subsequently.
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Samples: www.lynxbroker.com
Liquidity risk. Liquidity risk is the inability to buy or sell an investment at the desired time, or to transact in an instrument at all. When a delay occurs, such delay may affect the price at which such asset can actually be bought or sold. Also, instruments that are illiquid or that trade in lower volumes may be more difficult to value or to obtain reliable information about their value. Liquidity risk is linked to a variety of factors such as: • The the particular terms and conditions of an instrument; • The the fact that the instrument is not publicly traded or listed on an exchange; • Adversely adversely perceived market developments; • The the fact that the ownership of an investment is highly concentrated in one or small number of investors; • A a reduced number of financial institutions operating as market maker in the relevant financial instruments. For example, in the case of securitised derivatives (such as structured products), the only market maker might be the issuer itself (or an affiliated entity), who might provide a limited undertaking to act as market maker; • The the fact that market participants may attempt to sell holdings at the same time as the investor, and there may be insufficient liquidity to accommodate these sales. These factors may exist at the time of investment or may arise subsequently.
Appears in 1 contract
Samples: Customer Agreement