A security (e.g., a bond, stock, etc.) that trades with low volume, and as such is associated with a high degree of volatility. This state of thin tradability is marked with low volumes or wide bid-ask spreads as to a given security.

A thinly traded security cannot be easily sold or exchanged in the open market, usually without a significant impact on its price (as reflected in the bid-ask spread), and hence its market is said to be illiquid. Such a security is infrequently traded, resulting in a very limited number of transactions involving it.

Thinly traded securities usually encounter liquidity challenges such as wider spreads, fewer market makers, higher transaction costs, and uneasy establishment or unwinding of positions in such securities. Furthermore, these bonds are associated with less displayed size relative to bonds that trade in large volumes.