{"id":236839,"date":"2026-01-07T14:01:56","date_gmt":"2026-01-07T19:01:56","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?post_type=glossary-terms&#038;p=236839"},"modified":"2026-01-07T16:48:16","modified_gmt":"2026-01-07T21:48:16","slug":"emerging-markets-liquidity-risk","status":"publish","type":"glossary-terms","link":"https:\/\/www.interactivebrokers.com\/campus\/glossary-terms\/emerging-markets-liquidity-risk\/","title":{"rendered":"Emerging Markets &#8211; Liquidity Risk"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Liquidity risk<\/strong> is the possibility that positions cannot be transacted quickly at reasonable prices. In emerging markets, narrower bid\u2011ask spreads during calm periods can widen abruptly amid stress, and order books may thin, amplifying price impact.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Drivers and diagnostics:<\/strong> Market depth depends on market\u2011maker incentives, settlement infrastructure, and regulatory design (short\u2011selling rules, circuit breakers). Indicators include turnover ratios, free float, average daily volume, and failures\u2011to\u2011deliver statistics.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Portfolio management:<\/strong> Position sizing, staggered execution, and use of local brokers can reduce slippage. Liquidity premia should be embedded into required returns; mandates must align with redemption terms to avoid forced selling during outflows.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Liquidity risk is the possibility that positions cannot be transacted quickly at reasonable prices.<\/p>\n","protected":false},"featured_media":0,"parent":0,"template":"","meta":{"_acf_changed":false,"footnotes":""},"traders-glossary":[13254,13278,13251],"class_list":["post-236839","glossary-terms","type-glossary-terms","status-publish","traders-glossary-trading-terms-e","traders-glossary-ibkr-traders-glossary","traders-glossary-trading-alphabet"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Archives Term | IBKR Glossary | IBKR Campus<\/title>\n<meta name=\"description\" content=\"Liquidity risk is the possibility that positions cannot be transacted quickly at reasonable prices.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.interactivebrokers.com\/campus\/wp-json\/wp\/v2\/glossary-terms\/236839\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Emerging Markets - Liquidity Risk | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"Liquidity risk is the possibility that positions cannot be transacted quickly at reasonable prices.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.interactivebrokers.com\/campus\/glossary-terms\/emerging-markets-liquidity-risk\/\" \/>\n<meta property=\"og:site_name\" content=\"IBKR Campus US\" \/>\n<meta property=\"article:modified_time\" content=\"2026-01-07T21:48:16+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\n\t    \"@context\": \"https:\\\/\\\/schema.org\",\n\t    \"@graph\": [\n\t        {\n\t            \"@type\": \"WebPage\",\n\t            \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/glossary-terms\\\/emerging-markets-liquidity-risk\\\/\",\n\t            \"url\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/glossary-terms\\\/emerging-markets-liquidity-risk\\\/\",\n\t            \"name\": \"Emerging Markets - Liquidity Risk | IBKR Campus US\",\n\t            \"isPartOf\": {\n\t                \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/#website\"\n\t            },\n\t            \"datePublished\": \"2026-01-07T19:01:56+00:00\",\n\t            \"dateModified\": \"2026-01-07T21:48:16+00:00\",\n\t            \"description\": \"Liquidity risk is the possibility that positions cannot be transacted quickly at reasonable prices.\",\n\t            \"breadcrumb\": {\n\t                \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/glossary-terms\\\/emerging-markets-liquidity-risk\\\/#breadcrumb\"\n\t            },\n\t            \"inLanguage\": \"en-US\",\n\t            \"potentialAction\": [\n\t                {\n\t                    \"@type\": \"ReadAction\",\n\t                    \"target\": [\n\t                        \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/glossary-terms\\\/emerging-markets-liquidity-risk\\\/\"\n\t                    ]\n\t                }\n\t            ]\n\t        },\n\t        {\n\t            \"@type\": \"BreadcrumbList\",\n\t            \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/glossary-terms\\\/emerging-markets-liquidity-risk\\\/#breadcrumb\",\n\t            \"itemListElement\": [\n\t                {\n\t                    \"@type\": \"ListItem\",\n\t                    \"position\": 1,\n\t                    \"name\": \"Glossary\",\n\t                    \"item\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/glossary-terms\\\/\"\n\t                },\n\t                {\n\t                    \"@type\": \"ListItem\",\n\t                    \"position\": 2,\n\t                    \"name\": \"Emerging Markets &#8211; 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