A market situation that is characterized by a narrow bid-ask spread, i.e., a narrow, or narrowing, spread between the bid price and the ask price of a security. A close market (in a given security) is the result of active trading (high volume of trading) and the existence of multiple market makers on both sides of the market.
A close market implies a high market liquidity as due to the high trading volume and involvement of many participants there are many bids and offers for a security and participants can fractionlessly enter and exit for minimal transaction costs (including the narrow spread).
