Creating and maintaining liquidity are fundamentally different challenges, and trying to import the lessons and tools of mature markets into nascent markets invites failure. Even the classic definition and operationalization of liquidity may be a poor fit to the newest markets. Likewise, the concept of price resiliency as it is currently used may be too limited. Traditionally, resilience refers to the ability to execute large orders without unduly moving the market. It is also important to note that there is no single path to liquidity.
Different industries can have vastly different structures, business practices, and concerns.
Successful market partners will need to supply platforms and tools that are highly customizable so that they can precisely match the needs of the markets they are trying to serve. He has worked in the area of online markets since 1990, and heads research and strategic planning at onExchange. All rights reserved.