#Liquidity101 #Liquidity101

What is liquidity?

Liquidity refers to how easily and quickly an asset or security can be converted into cash without significantly affecting the market price of that asset. In simple terms, it is how easy it is to sell something you own and convert it to cash.

Key aspects of liquidity:

* High liquidity: Highly liquid assets can be converted to cash quickly and easily. Think of cash itself or savings in a bank account. Stocks that are heavily traded for large, well-known companies and highly traded government bonds are generally considered liquid.