In financial markets, liquidity refers to the ease of dealing in a security Ð whether shares, options, warrants or some other instrument Ð and turning them into cash.
Investment Dictionary - Liquidity
The Liquidity term refers to the easy with which an asset can be converted into cash.
Cash and assets easily converted to cash are liquid assets, and liquidity is the extent to which an individual or firm can produce cash when necessary.
Liquidity and Market Size
Unlike other financial markets such as the London Stock Exchange, the forex spot market does not have a physical location or a central exchange.
a measure of the number of shares, or dollar value of shares traded daily. Mutual funds and other institutional buyers prefer high liquidity stocks so they can easily move in and out of positions.
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Leverage ratio's provide investors and lenders with insight into a companies ability to meet its short term debt obligations.
The amount of trading activity, and thereby the ease with which you can get in and out of a market. Measured by volume (and open interest in the case of future markets). It is the capability to convert an asset to money quickly.
The degree of an asset's ability to be converted to cash at its fair market price ...
Liquidity Risk of OTC Stocks
by Slav Fedorov, Demand Media
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The ability of a company to pay off its debt obligations is measured by liquidity ratios.
There can be no ironclad assurance that, at all times, a liquid market will exist for offsetting a futures contract that you have previously bought or sold.
Market 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 term is usually shortened to liquidity.
In economics, a liquidity trap is a situation when the economy is stagnant and the interest rate is equal to, or slightly above, 0 percent.
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Trading Dictionary Terms and definitions for active trading, forex, futures, stocks, and options
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Can be high, with thousands of transactions being carried out on a continuous basis; or low, with only intermittent price-quote updates and transactions.
Liquidity: In terms of markets, liquidity generally refers to the ability to buy and sell assets quickly and in large volume without substantially affecting the asset’s price.
Liquidity in banking
Main article: Market liquidity § Banking ...
Liquidity theory of the term structure
A biased expectations theory that asserts that the implied forward rates will not be a pure estimate of the market`s expectations of Future interest rates because they embody a liquidity ...
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One of the most common questions new investors ask is, "If I invest in a home or in real estate, should I pay off the mortgage early?
Cash Flow Liquidity Ratio
Calculate Cash Flow Liquidity Ratio with our free online Cash Flow Liquidity Ratio Calculator.
Dark Pool Liquidity
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The ease and quickness with which assets can be converted to cash.
No profit, no liquidity
By Daniel P. Collins
A recent Bloomberg story highlighted how University of Chicago Professor Eric Budish is proposing a new electronic trading market structure for equities and derivatives.
Commodity market liquidity often correlates very well with commodity market trading profits. There are three benefits to traders in high commodity market liquidity. The first is that it is easier to enter and exit trades.
Market Size and Liquidity
Unlike other financial markets like the New York Stock Exchange, the forex spot market has neither a physical location nor a central exchange.
8) Understand how liquidity impacts the bid/ask spread
Very similar to #5 above. Higher options liquidity means higher trading volume, and thus, less variance when it comes to pairing up buyers and sellers.
How To Determine Options Liquidity?
Quite often I read articles which tell us that options liquidity can be measured by open interest.
Minimum Investments, Transaction Costs and Liquidity
The minimum investment for a mortgage security varies according to the structure of the offering, but most tranches sold to individual investors require a minimum investment of $1,000.
Winning traders make prices efficient and provide most liquidity. Utilitarian and futile traders effectively underwrite the winning traders' efforts.
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world of electronic trading and computerized trade-matching has allowed a proliferation of programmed high-frequency traders using among others highly sophisticated pattern recognition analysis to enter the trading arena under the guise of liquidity ...
Liquidity generally refers to how easily a non-cash asset can be converted to cash. As an example: US Savings Bonds are generally very liquid. A large building, requiring months to sell, is generally considered not very liquid.
Liquidity refers to an investor's ability to convert an asset into cash. The faster the conversion the more liquid the asset. Illiquidity is a risk in that an investor might not be able to convert the asset to cash when most needed.
See also: Market, Trading, Stock, Risk, Profit