#Liquidity101 refers to the ease with which an asset can be bought or sold in a market without significantly affecting its price. High liquidity indicates abundant buyers and sellers, leading to tighter bid-ask spreads and more efficient transactions.

Assets like stocks of large companies or currencies are highly liquid, while real estate or niche collectibles are less so. In financial markets, liquidity is crucial for stability, allowing participants to enter or exit positions with minimal slippage.

Market liquidity depends on factors such as trading volume, market participants, and regulatory frameworks. Enhanced liquidity fosters investor confidence and contributes to overall market health.