Liquid market

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A liquid market is one in which large quantities of the asset traded in the market can be bought or sold at any time, with low transaction costs, and without affecting the market price.


This implies there are sufficiently large numbers of willing buyers, if more of the asset becomes available to buy. This would mean that the market was sufficiently liquid.


If the market was insufficiently liquid it would mean there was a low or no demand for those assets. This could be, for example, due to other more attractive investments or low interest rates.


See also