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Liquidity

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Market round-up: Bourses regains 17K level on ample liquidity
The Economic Times  Nov 21  Comment 
Indian bourses ended well past the 17k-psychologically important level over the week as positive liquidity situation and a strong build-up in the derivatives series indicated bullish trend in short term.
Between a liquidity flood and unattractive valuations
FX Street  Nov 20  Comment 
Hungarian and Polish rate decisions take centre stage The Polish rate decision could be somewhat of a non-event as the Polish central bank (NBP) is likely to keep its key policy rate unchanged at 3.50%. There will be more uncertainty about the...
Still All The Same Markets - A Picture Worth a Thousand Charts
Blogging the Commodity Bull Market  Nov 19  Comment 
This shot says it all - the "all the same markets" hypothesis is still in play. Why bother with diversification when all the markets move in tandem? (Source: Barchart.com) Hat tip to Robert Prechter , who I believe was the first to...
BoC mulls making emergency liquidity permanent
Canada.com  Nov 19  Comment 
The Bank of Canada is studying whether some of the extraordinary liquidity supplied during the credit crisis should be made permanent to ensure the smooth functioning of financial markets.
Listed sector is now floating on liquidity
The Australian  Nov 18  Comment 
AUSTRALIA'S listed property trusts are sitting on $17 billion worth of cash and undrawn facilities after the rash of capital raisings and assets sales over the last 18 months.
BSE makes changes in F&O settlement to improve liquidity
The Economic Times  Nov 17  Comment 
The Bombay Stock Exchange has made certain changes in the settlement period of index based monthly futures and options as well as all weekly options contracts, a move that will improve liquidity in the derivative segment.
The 'haves' that soak up liquidity
Business Times - Singapore  Nov 13  Comment 
WHEN trading quietens down, it's quite common to see activity polarise into two segments - as it did this week, into segments that might be called the 'haves' and 'have nots'.
Between liquidity flooding and unattractive valuations
FX Street  Nov 13  Comment 
Turkish and South African rate decision takes centre stage The key events in EMEA next week will be the rate decisions in Turkey and South Africa. We expect the South African Reserve Bank (SARB) to keep its key policy rate unchanged at 7.0%. This...
Copernic (CNIC) Reports a Q3 Loss; Liquidity Sufficient Through Q3 2010
StreetInsider.com  Nov 12  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Copernic+%28CNIC%29+Reports+a+Q3+Loss%3B+Liquidity+Sufficient+Through+Q3+2010/5103540.html for the full story.
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more ▼WIKI ANALYSIS
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paolo pezzutti

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.

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