When the information that investors need to make investment decisions is widely available, thoroughly analyzed, and regularly used, the result is an efficient market.
This is the case with securities traded on the major US stock markets. That means the price of a security is a clear indication of its value at the time it is traded.
Conversely, an inefficient market is one in which there is limited information available for making rational investment decisions and limited trading volume.
- Browse Related Terms: Arbitrage, Balance of trade, Decimal pricing, Downtick, Efficient market, Moving average, Odd lot, Round lot, Xenocurrency