#Liquidity101 Liquidity 101 (100 words):

Liquidity refers to how quickly and easily an asset can be converted into cash without affecting its market price. Highly liquid assets, like cash or stocks, can be sold quickly at stable prices. Low liquidity assets, like real estate or rare collectibles, take longer to sell and may require discounts. In trading, liquidity ensures smooth buying and selling with minimal price slippage. A liquid market has many buyers and sellers, leading to tighter spreads and better pricing. For investors and traders, high liquidity reduces risk and increases flexibility, making it a key factor in choosing assets or entering markets.