Illiquidity Indices

Illiquidity indices are measures that help investors understand how easily they can buy or sell an asset without significantly affecting its price. In simpler terms, they gauge how "liquid" a market is—essentially how quickly and easily you can turn an asset into cash. A high illiquidity index indicates that it may be difficult to sell an asset quickly without losing value, while a low index suggests that transactions can happen easily and at stable prices. These indices are crucial for assessing risk, especially in investments like real estate, bonds, or certain stocks.