Illiquidity Index

The Illiquidity Index measures how difficult it is to buy or sell an asset quickly without affecting its price. A high index indicates that assets are hard to trade quickly, often due to a limited market or low demand, which might lead to larger price swings. Conversely, a low index suggests assets can be traded easily and with minimal impact on price, reflecting a more liquid market. This index helps investors gauge the ease and risk of trading certain assets or markets at any given time.