Why is market impact cost difficult to be measured? Solution why difficult? ->Th
ID: 1241241 • Letter: W
Question
Why is market impact cost difficult to be measured?Explanation / Answer
why difficult? ->These costs are notoriously difficult to measure, but they are the most amenable to improvement by careful trade management and execution. In financial markets, market impact is the effect that a market participant has when it buys or sells an asset. It is the extent to which the buying or selling moves the price against the buyer or seller, i.e. upward when buying and downward when selling. It is closely related to market liquidity; in many cases "liquidity" and "market impact" are synonymous.