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The big freeze

The US subprime crisis has shown how market illiquidity can affect trading. Yet liquidity risk is a fact of life for commodity firms. William Rhode looks at how to mitigate it

Given the sophistication of risk management techniques these days, it is ironic that there are so few answers when it comes to the question of managing the most debilitating risk of all - that of liquidity.

Whether it be for those firms seeking to trade in nascent, thin commodity markets, or for those that have to deal with the sudden and dramatic effects of volumes drying up in normally liquid

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