#Liquidity101

What is liquidity?: The ability to buy or sell an asset quickly and at a stable price.

Key characteristics:

1. Market depth

2. Tight bid-ask spreads

3. Low price impact

Importance:

1. Efficient trading

2. Reduced volatility

3. Increased market participation

Factors affecting liquidity:

1. Market demand

2. Number of market participants

3. Market volatility

Examples of liquid assets:

1. Major currencies (USD, EUR, JPY)

2. Large-cap stocks (Apple, Microsoft, Amazon)

3. Popular cryptocurrencies (Bitcoin, Ethereum)