Active Market -- Market where there is a very large amount of transactions in goods, bonds and stocks . Typically there is less divergence between bid and asked prices in an active market than in a subdued or quiet market.
An active market also holds when there is generally heavy trading on the exchange. Such a market allows for trading in big volumes of shares without influence on the direction of prices. Hence institutions managing the portfolios of clients favor an active market.
About the author
Copyright © 2007 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.