Education

connection to the “real” market and has a basis for existence.

Price movement. Prices of the instrument

have to be move enough to provide profitable opportunities for

traders, yet not be so volatile that they are gyrating

uncontrollably up and down without much reason. An instrument whose

price does not change or moves only minimally is not an attractive

place to tie up your money. When the price of an instrument does

move, you want the movement to be relatively fluid without a lot of

gaps that may make it difficult to get into or out of positions.

Liquid. Tied to the item above, volume

needs to be sufficient to allow you to get into and out of positions

with a minimum amount of loss due to slippage. A market with many

smaller positions is usually better for in-out trading that a market

dominated by a few large block orders. You want to be able to get in

smoothly but, more important, out just as smoothly whenever you

want.

Transparent. Complete information about

prices should be available to all traders, regardless of account

size. You want an open marketplace where everyone has access to

important statistics and data and current prices at the same time.