#Liquidity101

What is liquidity for beginners?

Liquidity is the ease of converting an asset or security into cash. Other liquid assets include stocks, bonds, and other exchange-traded securities. Tangible items tend to be less liquid, meaning that it can take more time, effort, and cost to sell them (e.g., a home).

Liquidity refers to the ease with which an asset can be converted into cash without significantly affecting its market price. In financial markets, liquidity is crucial because it determines how quickly and efficiently you can buy or sell an asset, like stocks, bonds, or cryptocurrencies.