#Liquidity101 Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price. Here's a breakdown:

*High Liquidity:*

- Assets can be quickly bought or sold.

- Prices tend to be stable.

- Examples: major currencies, stocks in large companies.

*Low Liquidity:*

- Assets may take time to buy or sell.

- Prices can be volatile.

- Examples: certain stocks, real estate, or niche assets.

In trading and investing, liquidity is crucial because it affects:

- *Transaction speed*: How quickly you can buy or sell.

- *Price stability*: Whether prices remain steady or fluctuate wildly.

- *Market efficiency*: How well markets reflect true asset values.

Want to know more about liquidity in specific markets or assets?