Liquidity

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The Economic Times  10 hrs ago  Comment 
Clearly we expect the economy to do much better in 2014-2015. So demand on the broader level, we expect, is something which is going to be good.
The Straits Times  Apr 4  Comment 
April 04, 2014 10:17 AM MANILA (Reuters) - The Philippine central bank remains vigilant on domestic liquidity and global developments, including a shift in United States Federal Reserve policy, to stem risks to the financial system, its chief...
The Economic Times  Apr 1  Comment 
Our focus is on rate of credit consistent with the rate of inflation that as well as economic growth we anticipated, says Raghuram Rajan.
Euromoney  Mar 31  Comment 
The CFTC is close to finalizing long-awaited rules for FX derivatives that will herald a seismic shift to trading these instruments on SEFs – but those already trading on SEFs are frustrated with teething problems and unintended consequences,...
The Economic Times  Mar 30  Comment 
Short-term rates this time bucked the trend of remaining elevated towards the end of FY, as RBI measures helped in avoiding the liquidity crisis.
The Economic Times  Mar 28  Comment 
We are done as far as Nifty is concerned or the election expectations. The movement is predominantly being driven by the emerging markets and BRIC funds.
DailyFinance  Mar 26  Comment 
CALGARY, ALBERTA -- (Marketwired) -- 03/26/14 -- Southern Pacific Resource Corp. ("Southern Pacific" or the "Company") (TSX: STP) announced today that further to the ongoing review of strategic and financial alternatives, it has entered into a...
SeekingAlpha  Mar 26  Comment 
ByAlberto Abaterusso: Biotech micro-caps, that is companies that operate in the biotechnology industry and have a market capitalization less than $300 million, are usually characterized by shortage of liquidity in stock markets. This peculiarity...
StreetInsider.com  Mar 18  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Elephant+Talk+%28ETAK%29+Delays+Q4%2C+FY13+Results%3B+Requires+More+Time+to+Evaluate+Liquidity+Position/9292524.html for the full story.
Banking Business Review  Mar 18  Comment 
Northern Trust is enhancing its collateral management and liquidity solutions in order to help clients meet the requirements of implementing various regulations, such as the Dodd-Frank Act and European Market Infrastructure Regulation (EMIR).




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Liquidity

Liquidity is defined as the ability to trade large size quickly at a low cost. It is one of the most important characteristics of a market. A liquid market allows traders to implement their strategies cheaply, normally with a limited bid/ask spread. A liquid market is characterized by high volume. It is generally less volatile than an illiquid market.

Usually, you can refer to three dimensions of liquidity - time, size and cost:

• “Immediacy” refers to how quickly you can execute a trade of a given size at a given cost.

• Width refers to the cost of executing a trade of a given size, including commissions.

• Depth refers to the size of a trade that can be executed at a given cost. Width and depth are very strictly related.

A liquid market is a market where you can trade large size quickly at low cost. Liquidity refers to how quickly you can convert your assets into cash. [1] Liquidation is the conversion of assets into cash by an Investor getting rid of a position in a particular type of security. [2]

For example, a portfolio manager might decide to liquidate a position in a stock by selling all the shares of that stock held in the portfolio. [3]

1610s, from liquidus. [1] Liquid Financial sense of "capable of being converted to cash" is first recorded 1818. [2]

References

  1. Stock Investing for Dummies‬ By Paul Mladjenovic pg22 ISBN-10: 0470401141
  2. Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott Accounting Professor ISBN-10: 0618176519 pg 212
  3. Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. ISBN-10: 0618176519 pg212

4. http://www.bestcashloans.org.uk/

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