#Liquidity101 The campaign #Liquidity101 explains what liquidity is in financial markets and why it is important. Liquidity refers to how easy it is to buy or sell an asset without significantly affecting its price.
A market with high liquidity has many active buyers and sellers. This offers several benefits:
Quick and easy orders to execute at the desired price.
Less slippage, meaning less difference between the expected price and the actual execution price.
Greater stability in the market, with less extreme volatility.
Price transparency, as it better reflects the actual supply and demand.
Understanding liquidity helps traders choose efficient markets and better manage their risk when trading.