#Liquidity101 What is liquidity, in simple terms?

Think of the market like a fair. If there are lots of people buying and selling the same thing (many stalls of "arepas" and lots of people wanting to buy them), it’s super easy for you to buy your arepas at the price you want and get them instantly. There's a lot of "flow".

But if there's only one arepa stall and no one else buying or selling, if you want one, the stall owner can ask for whatever they want, or if you want to sell yours, no one is going to buy them quickly. That’s low liquidity!