Price Impact refers to the effect that a trade or transaction has on the market price of an asset or security. It is primarily observed in financial markets when large buy or sell orders disrupt the normal supply and demand balance. When a substantial volume of an asset is bought or sold, it can lead to a significant change in its market price, either increasing it (for large purchases) or decreasing it (for large sales).
Price impact is an important consideration for traders and investors, as it can influence the total cost of executing a trade. In less liquid markets, where fewer transactions occur, the price impact can be more significant compared to more liquid markets, where many participants can absorb large trades without affecting the price as much.
Understanding price impact helps market participants assess the potential costs of their trading strategies and make more informed decisions regarding the timing and size of their trades.
The oversupply of lithium carbonate in China is exerting downward pressure on power battery cell prices, leading to a continuous decline, according to market research firm TrendForce. The current oversupply…