MarketWatch  Jul 8  Comment 
The waning ability to buy and sell securities in the market is one of the most important risks facing investors, according to Mohamed El-Erian. In an interview on CNBC Tuesday, the former Pimco chief executive said he believes it will become more...
Mondo Visione  Jul 8  Comment 
Singapore Exchange (SGX) today announced the launch of its liquidity hub at Hong Kong Exchanges and Clearing Limited’s (HKEx) Data Centre. This initiative follows HKEx and SGX signing a memorandum of understanding in December 2013 to cooperate...
Channel News Asia  Jun 30  Comment 
Singapore's three local banking groups are well-positioned to meet the Monetary Authority of Singapore's (MAS) new liquidity coverage ratio (LCR) requirements, Fitch Ratings said.
Mondo Visione  Jun 30  Comment 
Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today publishes its revised Rule Book for the Thomson Reuters Matching community, reinforcing practices designed to safeguard liquidity and...
FX Street  Jun 30  Comment 
Market Review Entering last week we were concerned of the lack of data hitting the market and... For more information, read our latest forex news and reports.
The Economic Times  Jun 26  Comment 
The Shanghai Composite Index gained 0.7% at 2,038.68 points. The CSI300 of the leading Shanghai and Shenzhen A-share listings was also up 0.7%.
Channel News Asia  Jun 25  Comment 
Analysts say banks in Singapore may face difficulties in meeting the new liquidity requirements that were announced on Tuesday.
The Straits Times  Jun 24  Comment 
June 25, 2014 1:10 AM TIGHTER rules aimed at bolstering the cash buffer banks must hold in case of emergency will take effect in January, Trade and Industry Minister Lim Hng Kiang said yesterday.
FX Street  Jun 24  Comment 
The world stock markets had a decline in prices on Monday. This happened in spite of positive... For more information, read our latest forex news and reports.


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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]


  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


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