Liquid and Illiquid Markets

Liquid and Illiquid Markets - A liquid market is one in which changes in supply and demand have little impact on the asset's price. It is characterized by many bids, offers and players/traders, low volatility and tight spreads.

Liquid and Illiquid Markets - The ability of a market to buy and sell at ease with no impact on price stability. A market is described as liquid if the spread between the bid and the offer is small.

See also: Balance Sheet, Commodity, Hedge, Close, Liquidation