Direct volumetric absorption of solar radiation is possible with fluids which have controlled optical properties. As with conventional surface absorbers, it is possible to make direct absorbing collectors 'selective' where short wavelength absorption is maximised, but long wavelength emission is minimised. This work investigates the fundamental limits of this concept as it pertains to nanofluid-based direct absorbing collectors. This is especially important at higher operating temperatures (100-600 degrees C) where radiative losses increase significantly. A study of optical parameters of collector components is conducted herein to investigate the best theoretically (and practically) achievable 'selective' nanofluid-based direct absorbing collectors. When the effect of the short wavelength optical properties was investigated, a short wavelength optical depth of 3 was found to be sufficient for efficient absorption of solar radiation while scattering is minimised. It is also advantageous to use a base fluid which shows weak absorption at long wavelengths to reduce emission losses. Overall, this study directs future research of direct absorption by underlying theoretical and real-world limitations of a selective direct absorbing collector an emerging receiver technology that can be used for efficient solar thermal harvesting. (C) 2015 Elsevier Ltd. All rights reserved.