Liquidity
1. The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity.

2. The ability to convert an asset to cash quickly. Also known as "marketability".

Investopedia Says:
1. It is safer to invest in liquid assets than illiquid ones because it is easier for an investor to get his/her money out of the investment.

2. Examples of assets that are easily converted into cash include blue chip and money market securities.

Related Terms:
Cash
Core Liquidity
Core Liquidity Provider
Illiquid
Liquid Asset
Liquidity Cushion
Liquidity Risk
Maturity Mismatch
Short Squeeze
Volume

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