There is more to a quote than the price.

The number and the capacity behind it

A quoted price is one part of the picture. The channel’s liquidity explainer asks readers to consider who is offering that price and how much trading it can support.

Its focus is the mechanism behind liquidity: the distinction between seeing a quote and understanding the depth available around it.

Context before conclusions

The original post discusses seasonal conditions in August. That timing matters. It should not be read as a measurement of liquidity today, or as evidence about every venue and currency pair.

Use the question, not a shortcut

When evaluating a claim about “thin markets”, ask what market, time period and evidence it refers to. A useful explanation makes those limits visible.

Three different questions

• Spread: how far apart are the available buying and selling prices?
• Depth: how much can be traded at or around those prices?
• Price impact: how much does execution move the price?

These are related, but they are not identical. In a simplified example, two screens might show the same best price while the amount available there differs. An order larger than that amount then needs other willing counterparties or other prices.

FX liquidity is also fragmented. A public order book is not a complete view of every transaction or every source of liquidity. The BIS report on execution algorithms discusses why evolving execution methods can make liquidity harder to measure.

That is why “the spread looks normal” is a narrower observation than “liquidity is normal”. Specify what was measured before extending the conclusion.

Background: BIS Markets Committee — FX execution algorithms and market functioning.