#Liquidity101

Liquidity plays a major role in how smoothly trades are executed. Low liquidity can lead to slippage, poor pricing, or even failed trades - especially during volatile market conditions. Cash is the most liquid asset, while real estate or collectibles are less liquid due to the time and effort needed to sell them. In financial markets, high liquidity means assets can be traded swiftly with minimal price fluctuations. This is crucial for investors, as it reduces risk and enhances flexibility.