#Liquidity101

Liquidity is a fundamental concept in financial markets, and it refers to the ease of converting an asset into cash without significantly affecting its price. The higher the liquidity, the easier it is to buy or sell at a price close to the current market price. For example, major currencies like the dollar and the euro are considered highly liquid, while small-cap stocks or real estate are often less liquid. Liquidity is important because it reduces the gap between the buy and sell price and gives investors the freedom to enter and exit quickly. Smart liquidity management helps achieve better profits and reduces risks across all types of investments.