Commodidex

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{{tag>indicators basics}}

====== Liquidity ======

===== Summer Season =====

  * The market's current low liquidity during the summer months has further amplified this downturn.((https://archive.ph/j4m47#selection-3657.240-3657.336))

===== Low Liquidity =====

“It is the lack of physical activity — confined only to desperate covering of nearby physical contracts — that has caused the drying up of their normal futures activity, reducing the liquidity,” said Pam Thornton, a veteran commodity trader at Nightingale Investment Management, who’s best known for her role at former cocoa hedge fund Armajaro Asset Management. “So <wrap hi>if you have to buy futures, you can easily move the market very quickly</wrap>.”((https://archive.ph/L7TY3#selection-2253.0-2253.440))

Once again, I don’t recommend trading in markets that aren’t capable of providing the liquidity necessary for seamless entry and exit. [(:ref:a_traders_first_book_on_commodities)]

Liquidity is also returning to the futures market, with open interest in global benchmark Brent near the highest since last February. 

===== Aluminum =====

IXM, owned by China’s CMOC Group Ltd., has built up an unusually large position in the LME’s aluminum contract for delivery tomorrow, which as the third Wednesday of the month is a key focal point for liquidity, according to people familiar with the matter who asked not to be identified discussing private information.

===== Jargon =====

  * //"More liquidity also entered the sector, with players increasingly setting up metals trading desks for commodities related to the energy transition."//((https://archive.ph/IqERe#selection-1109.329-1109.476))