Definition
The degree to which an asset can be quickly bought or sold in the market without affecting its price. High liquidity means an asset can be converted to cash easily with minimal loss of value.
Example Usage
"Treasury bonds offer excellent liquidity, allowing investors to convert their holdings to cash almost immediately when needed.”
Related Terms
Price DiscoveryBid-Ask SpreadTrading VolumeMarket DepthSecondary Markets
Tags
Market MechanicsTradingRisk Management
Course Module
Module 1: Introduction to Financial Markets