Liquidity risk is the most significant for this type of investment.
Liquidity risk refers to how a bank's inability to meet its obligations (whether real or perceived) threatens its financial position or existence. Institutions manage their liquidity risk through effective asset liability management
Thin trading of security suggests an illiquid market for that investment. A wide spread indicates a larger-than-normal spread between the ask and bid prices for an investment. Market risk, or the possibility that the value of a security will be impacted by the market, is a genuine concern, but it is not the main one for a lightly traded stock. Even if the stock market grows, the stock may still be difficult to trade.
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