Thin Trading refers to a market situation where a security has low trading volume, meaning very few buyers and sellers are actively trading it.
In thin trading, the number of transactions is low, which leads to low liquidity. Because of fewer participants, even a small buy or sell order can cause significant price movements.
Such stocks are often found among small-cap or lesser-known companies. Trading still occurs on exchanges like the National Stock Exchange and Bombay Stock Exchange under regulation of the Securities and Exchange Board of India.
"A stock trades only a few shares per day, and a single large order causes a sharp price jump—this is thin trading."