Liquidity
How easily an asset can be bought or sold without moving its price much. Liquid assets have many willing buyers and sellers and tight spreads; illiquid ones can only be sold quickly at a discount.
Also called liquid · illiquid
How easily an asset can be bought or sold without moving its price much. Liquid assets have many willing buyers and sellers and tight spreads; illiquid ones can only be sold quickly at a discount.
Why it matters
Liquidity tends to disappear exactly when it is most needed, which is why illiquid positions can fall further than expected in a sell-off.
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