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Information > Financial Terms > This page Inactive Securities Stocks
OR bonds not frequently traded, whether listed on stock exchanges or unlisted.
There are degrees of activity and inactivity.
Many securities are not traded daily, some not being quoted more
than once a month. One of
the objectives of stock exchange listing requirements is to require prerequisites
of sufficient distribution of stock ownership in order to tend to create
turnover and trading activity. In
the course of time, changes causing inactivity in originally qualified
listed issues would relegate the issues to the INACTIVE POST on the New
York Stock Exchange. From
the standpoint of collateral (loan) value, any security that is traded
every day may be regarded as active, although varied trading volume reflects
degrees of activity. From
a broker's standpoint, however, a security may not be considered relatively
active unless, say, 50,000 shares per day are traded; an inactive security
might be one in which, say, 500 shares or less are traded. Back to Information |