Liquidity refers to the efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price. The most liquid asset of all is cash itself.Let’s break this down into two parts. First, “the ease with which an asset can be converted into cash.” This property is known as an asset’s volume, which measures how much of an asset is traded during a certain time period. An asset with a lot of aggregate value moving between entities in a short period of time is a high volume asset.
Liquidity is All You Need
Liquidity refers to the efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price. The most liquid asset of all is cash itself.Let’s break this down into two parts. First, “the ease with which an asset can be converted into cash.” This property is known as an asset’s volume, which measures how much of an asset is traded during a certain time period. An asset with a lot of aggregate value moving between entities in a short period of time is a high volume asset.