Listen to a Business English Dialogue About Away from the market
Molly: Hi Jimmy, have you heard of the term “away from the market” in finance?
Jimmy: No, I haven’t. What does it mean?
Molly: “Away from the market” refers to a situation where there’s limited or no trading activity for a particular security or asset, typically due to lack of buyer or seller interest.
Jimmy: Oh, I see. How does being “away from the market” affect investors?
Molly: Being “away from the market” can make it challenging for investors to buy or sell the asset at a fair price, as there may be fewer counterparties willing to trade, leading to wider bid-ask spreads and increased transaction costs.
Jimmy: That sounds inconvenient. Can you give an example of when a security might be “away from the market”?
Molly: Sure, a less liquid or thinly traded stock might be “away from the market” if there’s little trading activity, making it difficult for investors to execute trades at favorable prices.
Jimmy: I understand. Are there any strategies investors can use when dealing with securities that are “away from the market”?
Molly: One strategy is to be patient and wait for trading conditions to improve, while another is to use limit orders to specify the price at which they’re willing to buy or sell the asset, which can help mitigate the impact of wider spreads.
Jimmy: Thanks for explaining, Molly. “Away from the market” seems like an important concept for investors to understand when trading less liquid assets.
Molly: Absolutely, Jimmy. It’s crucial for investors to be aware of market conditions and adjust their trading strategies accordingly to navigate less liquid markets effectively.