#Liquidity101

Liquidation is a basic and important topic to understand in trading. The more liquid an asset is, the easier and more efficient it will be to convert it into cash. Less liquid assets require more time and may have a higher cost.

Therefore, in conclusion.

Liquidity refers to the ease with which an asset or security can be converted into available cash without affecting its market price.

The two main types of liquidity are market liquidity and accounting liquidity.

The current, quick, and cash ratios are the most commonly used to measure liquidity.