#Liquidity101 Liquidity is the ease with which an asset can be bought or sold without causing a significant change in its price. It is a measure of how active and efficient a market is. A liquid market allows trades to happen quickly, with minimal delay or price fluctuation.

For instance, in a liquid market like the stock exchange, there are many buyers and sellers at any given time. If you want to sell shares of a popular company, you can find a buyer almost instantly, and the price you receive will be close to the market rate. The high number of participants ensures that prices remain stable, and trades are executed smoothly.