Price Sensitive Market

Price Sensitive Market

A market in which a security's or product's price changes dramatically in the face of increased or decreased demand. Price sensitive markets generally contain securities with comparatively few shares outstanding; a large order to buy or sell is likely to affect the price more strongly than a similar order for a company with more shares outstanding. In other products, price sensitivity is largely based on whether a given product is considered a necessity or a luxury. A "luxury" product is likely to be more sensitive.