#Liquidity101

Liquidity is the ability of an asset (such as stocks, currencies, cryptocurrencies) to be bought or sold quickly without significantly affecting the market price.

There are 2 main types of liquidity:

1. High liquidity: Assets that can be bought or sold quickly without affecting the market price.

2. Low liquidity: Assets that are difficult to buy or sell, and the market price may be affected.

Factors affecting liquidity:

Trading volume

Diversity of buyers and sellers

Market liquidity

Nature of the asset

Liquidity is an important factor in financial markets, as it helps ensure that transactions are carried out efficiently and fairly.