What is liquidity ?

In finance and trading, liquidity refers to how quickly and easily an asset can be bought or sold in the market without causing a significant change in its price.

​Think of liquidity as a measure of market efficiency:

​High Liquidity: Lots of active buyers and sellers. You can trade large amounts immediately at predictable prices.

​Low Liquidity (Illiquid): Few buyers or sellers. Trades take longer to execute, or you must accept a worse price to complete the transaction.