Liquidity refers to how easily an asset can be bought or sold at its current market price without affecting that price. Cash is the most liquid asset. Stocks of large companies like Apple or Microsoft are highly liquid (millions of shares trade daily). Small-cap stocks and real estate are less liquid. Low liquidity can make it hard to exit a position quickly.
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Market Navigator Glossary — plain-English definitions of 93+ investing and crypto terms. All content is for educational purposes only and does not constitute financial advice.