Stocks trade frequently. Corporate bonds do not. Most listed bonds might go days without a single trade. Even when they do trade, one large institutional print can make a bond look "actively traded" while in practice, a retail investor still cannot buy or sell it without real friction. That is the gap our liquidity badges (Active, Moderate, Very Thin) try to capture.
How are the badges decided
For each corporate bond, every trading day, we look at two numbers: the day's total traded value (turnover) and the number of individual trades. The rule is as follows:
- Active — turnover of at least ₹50 lakhs and at least 10 separate trades that day
- Moderate — turnover of at least ₹1 lakh (regardless of trade count)
- Very Thin — everything else, including no trades at all
Why "Active" needs two conditions and not just one
Turnover alone can be misleading for bonds. One big institutional trade - say ₹50 lakhs - is enough to clear the turnover bar for the whole day, even if it is the only trade that took place. That bond looks "active" on paper, but is just as hard to buy or sell as the one with no trades at all. Requiring at least 10 trades alongside the turnover threshold filters that out.
Ten separate trades in a day means more than one buyer and seller showed up - a genuine market, not a single negotiated print. Which is is why Moderate only checks turnover. Beneath the Active bar, it is difficult to ascertain a real two-sided market. What can be said is that something just traded.
What each badge means for you
- Active — reasonable to expect you could transact same-day near the quoted price. Check the actual quote before committing size.
- Moderate — tradeable, but be patient and mind the price impact. On a large order, you may move the price more than you would like.
- Very Thin — treat any quoted price with skepticism. With this little trading, the "last price" may be stale or reflect a single unrepresentative trade, and you may struggle to execute at or near it at all.
None of this is a recommendation to avoid Very Thin bonds. Illiquid does not mean bad. Plenty of legitimately good bonds are illiquid (and therefore carry illiquidity premium) simply because whoever holds them is not willing to sell them. Therefore, the liquidity badge is only telling you how easily you could get in or out, not how good the bond is.
See it applied across the current list on the Corporate Bonds page.