Liquidity

A security's liquidity is how easily it can be bought or sold without moving its price. It shows up in traded volume and above all in the spread, the gap between the best bid and the best offer at any moment. It is an invisible cost that appears in no commission line: in a thin stock, getting in and out can cost several tenths of a percent before the price has moved a cent. And it is a risk as well as a cost, because liquidity tends to vanish exactly when it is most needed, in falling markets.

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Definition for informational purposes. It is not financial advice nor a recommendation to buy or sell.