#TradingTools101

#Liquidity101

Liquidity 101

Liquidity is a fundamental concept in finance that refers to the ease with which an asset can be converted into cash without significantly affecting its market value. It is crucial for individuals, businesses, and entire financial systems.

Here is a breakdown of the concept of liquidity:

What is liquidity?

Simply put, liquidity is about how quickly and efficiently something can be turned into spendable cash.

* High liquidity: assets that can be quickly sold or exchanged for cash at their market value or very close to it. Examples include cash itself, money in checking accounts, and heavily traded stocks.