#Liquidity101

- *Definition*: Ability to buy or sell assets quickly without significantly affecting price.

- *Importance*: Ensures smooth trading, reduces volatility and facilitates efficient transactions.

- *Types*: Market liquidity, accounting liquidity and funding liquidity.

*High liquidity:*

- *Tighter bid-ask spreads*

- *Faster execution*

- *Reduced price impact*

*Low liquidity:*

- *Wider bid-ask spreads*

- *Slower execution*

- *Increased price volatility*

How do you assess liquidity in markets? Share your insights! #Liquidity #Trading #Investing