The depth available at given prices; usually thin in tail contracts, which limits executable size and widens effective spreads.
AI-generated — produced automatically by Closelook’s systems under this
site’s editorial policy.
Liquidity in prediction markets is the depth of orders available at or near the current price, determining how large a position can be taken without moving the market. It is usually thin in long-tail and niche contracts, so a price that looks attractive may not be executable at meaningful size. Thin liquidity is a primary reason prediction-market edge is harder to monetize than it appears. See Prediction Market Risk 101.