From Wikipedia, the free encyclopedia.
Liquidity is a business or economics term that refers to the ability to quickly buy or sell a particular item without causing a significant movement in the price.
The essential characteristic of a liquid market is that there are ready and willing buyers and sellers at all times.
A market is considered deeply liquid if there are ready and willing buyers and sellers in large quantities.
Often investments in liquid markets such as the stock exchange are considered to be more desirable than investments that are considered relatively illiquid, like real estate. This is because the forced sale or purchase of an item in an illiquid market may be at a disadvantageous price.
Speculators and market makers contribute to the liquidity of a market.
