Frictionless market

In economic theory a frictionless market is a financial market without transaction costs.{{cite web|title=Frictionless Market - Investopedia|url=http://www.investopedia.com/terms/f/frictionlessmarket.asp|accessdate=October 14, 2011}} Friction is a type of market incompleteness. Every complete market is frictionless, but the converse does not hold. In a frictionless market the solvency cone is the halfspace normal to the unique price vector. The Black–Scholes model assumes a frictionless market.{{cite book|title=All About Derivatives|first1=Michael|last1=Durbin|year=2010|publisher=McGraw-Hill Professional|edition=2|isbn=978-0-07-174351-8|page=165}}