Limits on how much capital and inventory a dealer, market maker or authorized participant can commit at a given time, set by its own risk limits, funding and regulatory capital requirements.
Covered in: Why ETF Liquidity ≠ AUM · Why ETFs Surface Liquidity Constraints Faster Than Mutual Funds
Related terms
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This material is provided for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security.
All views expressed are the author’s own and do not represent the views of any employer or affiliated organization.