market liquidity

Market liquidity refers to how easily an asset can be bought or sold in a market without affecting its price. High liquidity means there are many buyers and sellers, allowing for quick transactions at stable prices, like in the stock market. Low liquidity suggests fewer participants, making it harder to sell or buy without significantly changing the asset's price, which can happen in niche markets like real estate or collectibles. Essentially, liquidity measures the market's ability to handle transactions smoothly and efficiently.