Tradable

Tradable describes an asset, commodity, security, or other item that can be bought and sold in a market. Its key characteristic is liquidity, meaning it can be readily converted into cash without a significant loss in value. The tradability of an asset is influenced by factors such as market demand, the number of buyers and sellers, and the ease of transaction. High tradability typically indicates a well-established and efficient market, whereas low tradability suggests a less liquid market with potential challenges in quickly executing trades at desired prices. It is a crucial concept in finance, economics, and commodity markets.

Tradable meaning with examples

• Gold is a highly tradable commodity because it's widely accepted and has many buyers and sellers globally. This makes it easy to buy or sell gold quickly and efficiently.
• Shares of large, publicly traded companies are generally considered highly tradable on major stock exchanges, offering investors significant liquidity for their investments.
• Real estate, while valuable, can be less tradable than stocks or bonds, as the process of buying and selling often takes more time and involves considerable paperwork.
• A currency futures contract is a tradable instrument, giving investors the right to buy or sell a set amount of currency at a predetermined future date and price.
• Due to the current economic conditions some of the countries debt are not tradable due to lower demand and higher risk of default by investors.