Strategic_insights_into_kalshi_markets_and_forecasting_accuracy_today
The Role of Liquidity in Pricing
Liquidity refers to the ease with which a contract can be bought or sold without causing a significant change in its price. In highly liquid markets, the spread between the bid and the ask is narrow, allowing traders to enter positions with precision. When liquidity is low, however, a single large trade can move the market price drastically, which may not necessarily reflect a change in the actual probability of the event but rather a lack of available counterparties.
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