#Liquidity101 Liquidity 101:

Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price. Highly liquid assets, like cash or large-cap stocks, can be traded quickly with minimal bid-ask spread. In contrast, illiquid assets, such as real estate or low-cap cryptocurrencies, may be difficult to sell quickly without a large discount. In financial markets, liquidity is crucial for smooth transactions, risk management, and price stability. Traders and investors should pay attention to liquidity to enter or exit positions efficiently, especially during times of market volatility.