The bond market is much less
liquid than the stock market.
Both open interest and volume are key indicators of liquidity, which is actually really important because the options market is generally much less
liquid than the stock market.
Not exact matches
As I am mostly concentrated on
liquid financial
markets, I have been searching for good
stock ideas where real estate held might be worth considerably more
than the
market capitalization.
As Options are usually less
liquid than the underlying
stock,
Market Makers are usually more active in «Providing a
Market» with Options.
If I have two securities A and B (they can be any combo of
stock, etf, index, option), then is it oversimplification to assume that if A has a more
liquid market than B, then A is more efficiently...
e.g. on a universe of all
liquid stocks with pretty generous liquidity filters (price > $ 1, mcap > $ 100 million, on the
market for at least 1 year, inflation - adjusted daily dollar volume in the last 63 days > $ 100,000), before friction, and hold for 5 days (no other sell rule), tested on all start dates Sept 2, 1997 forward to Aug 18, 2015 and then averaged CAGR, leaving an average of 3360
stocks in the universe to then test: a. 17.6 % cagr bottom 5 % of
stocks left by bad 4 day return (requiring price > ma200 was slightly worse
than this at 17.4 %; but requiring price < ma5 was better at 18.1 %) b. 16.0 % cagr bottom 5 % of
stocks left by bad 5 day return c. 14.6 % cagr bottom 5 % by rsi (2) d. 14.7 % cagr for rsi (2) < 5 I have tested longer backtests on simpler liquidity filters (since my tests can't use all of the above filters on very long tests) and this still holds true: bad return in the last 4 or 5 days beats low rsi (2) for 1 week holds.
Micro-cap
stocks involve substantially greater risks of loss and price fluctuations becuase their earnings and revenues tend to be less predictable (and some companies may be experiencing significant losses), their share prices tend to be more volatile, and their
markets less
liquid than companies with larger
market capitalizations.
Speaking of Vanguard, it's making its second foray in the world of
liquid alts (after Vanguard
Market Neutral) with Vanguard Alternative Strategies Fund seeks to generate returns that have low correlation with the returns of the stock and bond markets, and that are less volatile than the overall U.S. stock m
Market Neutral) with Vanguard Alternative Strategies Fund seeks to generate returns that have low correlation with the returns of the
stock and bond
markets, and that are less volatile
than the overall U.S.
stock marketmarket.
Sure, and the
market for Apple
stock is less efficient and
liquid than the
market for 90 - day T - bills.
We have a few Credit Unions that have over 2 % return while its not much it is safe and
liquid and better
than the
Stock Market did in the last year.
Emerging economies might offer greater growth potential
than advanced economies, but the
stocks of companies located in emerging
markets could be substantially more volatile, risky, and less
liquid than the
stocks of companies located in more developed foreign
markets.
Currently, bitcoin is substantially more
liquid than the most
liquid stock on earth that is Apple, and process more trades
than major
stock markets such as South Korea's KOSDAQ.
Realize, though, that while investing in single - family rental houses is more stable
than the
stock market, rentals are not exactly
liquid assets.