#Liquidity101

Liquidity 101 Summary (100 words):

Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price. High liquidity means assets can be traded quickly with minimal price changes—common in major stocks or cryptocurrencies. Low liquidity means fewer buyers or sellers, leading to larger price swings and difficulty entering or exiting positions. Market liquidity applies to the overall market, while asset liquidity focuses on individual instruments. Liquidity is crucial for efficient trading, tighter spreads, and fair pricing. Traders prefer liquid markets for stability and ease, while illiquid assets can pose higher risks and costs during volatile conditions.