- In tight markets, the price difference between the best bid and offer is very narrow, meaning that buyers and sellers are very close to agreeing a price.
- The tightest markets tend to reflect the most actively traded (liquid) wines.
- Current tight markets include Château Beychevelle 2018 and Opus One 2015 to name but two.
What are tight markets and why are they important?
Tight markets are characterised by a small difference between the bid and offer price. Abundance of buyers and sellers and intense price competition on both sides lead to tighter markets.
For instance, at the time of writing, Château Montrose 2018 has a bid at £680 and an offer for £685 per 6×75. This small difference (0.8%) between the buying and selling increases the chance of both parties reaching an agreeable trade price.
Tight markets are usually the most liquid. Wines with narrower spreads are more likely to attract buyers and sellers and therefore, high trading volumes.
Tight markets can also be facilitated by market makers, who provide market liquidity by constantly quoting bid and offer prices for a select group of wines.
The tightest markets on Liv-ex
Active wines like the Super Tuscans, Bordeaux’s First and Second Growths and leading Champagne labels often have the narrowest spreads.
Amongst the Super Tuscans, Sassicaia 2018 currently has one of the tightest spreads. The LIVE bid for the wine is at £1,136 against the LIVE offer at £1,152 per 6×75 – a mere 1.4% spread.
The wine last traded at £1,136 per 6×75, but all formats, including magnums and double magnums are enjoying activity.
Sassicaia 2018 trades on Liv-ex
As a Liv-ex member, you can explore the tightest markets at any one time under the Opportunities tab on the platform and enjoy a more efficient trading experience.
Liv-ex analysis is drawn from the world’s most comprehensive database of fine wine prices. The data reflects the real time activity of Liv-ex’s 560+ merchant members from across the globe. Together they represent the largest pool of liquidity in the world – currently £100m of bids and offers across 16,000 wines. Independent data, direct from the market.
