#Liquidity101

Liquidity is a core concept in finance that refers to how quickly and easily an asset can be converted into cash without significantly affecting its price. Highly liquid assets, like stocks of major companies or cash itself, can be bought or sold almost instantly. In contrast, real estate or collectibles are considered less liquid because they may take longer to sell at a fair price. In trading, liquidity also affects bid-ask spreads—the more liquid a market, the tighter the spread, making transactions cheaper for traders. Understanding liquidity helps investors manage risk and make informed decisions. #liquidity101