#交易流动性 Four-Dimensional Measurement Indicators

Speed (Timeliness): The speed of trade execution, such as the stock market which can typically execute trades in real-time.

Price (Bid-Ask Spread): The smaller the spread, the higher the liquidity. For example, in the foreign exchange market, currency pairs with ample liquidity (like EUR/USD) usually have spreads lower than 0.1%.

Quantity (Market Depth): The ability to execute large orders at reasonable prices. For instance, after the liquidity improvement at the Northern Exchange, the average daily trading volume increased from 2.6 billion to 43.6 billion, supporting a doubling of stock prices.

Elasticity (Price Recovery): The speed at which prices return to equilibrium after being impacted. A highly elastic market can quickly absorb short-term fluctuations.

Significance for Investors

Risk Management: High liquidity assets (like large cap stocks) facilitate stop-loss and portfolio adjustments, reducing the risk of a "liquidity trap."

Trading Costs: When liquidity is plentiful, the bid-ask spread is small, reducing trading friction costs. For example, when A-shares have ample liquidity, individual stocks are easy to rise but difficult to fall.

Opportunity Capture: Liquidity distribution can reveal institutional trends. For instance, when prices break through key resistance levels, it may trigger stop-loss orders (liquidity traps), followed by a trend reversal.

Significance for the Market