Liquidity

Market Structure

How easily a security can be bought or sold without significantly affecting its price. High liquidity means tight spreads and easy execution; low liquidity means wider spreads and potential slippage.

Related Terms

Spread

The difference between the bid and ask price.

Slippage

The difference between the expected execution price and the actual fill price.

Volume

The number of shares or contracts traded in a security during a given period.

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