Thin market

A thin market is a situation in which there are few participants in a stock market who are willing to buy or sell a security. In this case, there can be a substantial spread between bid and ask prices, and the introduction of large buy or sell orders can dramatically impact the price of the security. Investors generally try to avoid securities with thin markets, since they may have to buy securities at inflated prices and may see a sharp price drop when they later offer to sell the securities.

Related Courses

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