liquidity

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Related to Liquid Markets: Illiquid Market, Illiquid Assets

Liquidity

In context of securities, a high level of trading activity, allowing buying and selling with minimum price disturbance. Also, a market characterized by the ability to buy and sell with relative ease.
In context of a corporation, the ability of the corporation to meet its short-term obligations. Measured with liquidity ratios like current ratio, quick ratio, and cash ratio.
Antithesis of illiquidity.

Liquidity

Easy convertibility into cash. A liquid asset or security can be easily bought or sold with little or no impact on price. Most methods of counting money supply include some highly liquid investments such as certificates of deposit. Liquid assets and investments are highly desirable as they may be sold to allow an investor to enter other investments as they arise. On exchanges, liquid investments usually have low bid-ask spreads. See also: Illiquid, Liquidity preference hypothesis.

liquidity

A large position in cash or in assets that are easily convertible to cash. High liquidity produces flexibility for a firm or an investor in a low-risk position, but it also tends to decrease profitability.

Liquidity.

If you can convert an asset to cash easily and quickly, with little or no loss of value, the asset has liquidity. For example, you can typically redeem shares in a money market mutual fund at $1 a share.

Similarly, you can cash in a certificate of deposit (CD) for at least the amount you put into it, although you may forfeit some or all of the interest you had expected to earn if you liquidate before the end of the CD's term.

The term liquidity is sometimes used to describe investments you can buy or sell easily. For example, you could sell several hundred shares of a blue chip stock by simply calling your broker, something that might not be possible if you wanted to sell real estate or collectibles.

The difference between liquidating cash-equivalent investments and securities like stock and bonds, however, is that securities constantly fluctuate in value. So while you may be able to sell them readily, you might sell for less than you paid to buy them if you sold when the price was down.

liquidity

the possession by a person or business of a stock of monetary assets which can be used directly to finance the purchase of goods and services and capital assets. See MONEY, MONEY SUPPLY.

liquidity

the extent to which an ASSET can be quickly and completely converted into CURRENCY (notes and coin) in order to be used as a means of payment. Monetary assets (see MONEY) are the most liquid since they are widely acceptable as a medium of exchange, while durable and highly specific assets, such as a machine, are the least liquid since such assets can be converted into money only after a willing buyer has been found and a money value placed on the asset.

liquidity

The ability of a person or company to readily and easily obtain cash from its assets in order to meet obligations or make purchases.

References in periodicals archive ?
Building on the success and growth of the company over the last six years, this new phase as Liquid Markets seeks to offer a greatly enhanced trading experience both in terms of cutting edge technology and execution and new highly competitive trading conditions.
Chief Operations Officer, Tamer Eid, says: "At Tadawul FX, we are very excited about our upcoming rebrand to Liquid Markets, which reflects our new vision and the next phase of our development.
First, as President of Liquid Markets, Stu will immediately take on management responsibility for running the business, which will allow Michael Novogratz and Adam Levinson, Co-CIOs of our Macro funds, and Bill Callanan, CIO of our Commodities Funds, to focus exclusively on investments.
Aqua is designed to trade large orders in liquid markets, whereas Arid is intended for illiquid securities, such as small cap stocks.
CDO investors) to adopt a methodology that utilizes wider geographical and industrial information coming from reliable & global liquid markets.
PHLX XL provides a fully electronic trading platform for deep and liquid markets for the BKX and to assure that the composition is highly representative of the banking industry, Keefe, Bruyette & Woods evaluates the index at least annually.
of assets under management as at December 31, 2002, the Caisse invests in the main liquid markets as well as in private equity and real estate.
Joseph Cammarata, Managing Director, Sonic Financial Technologies said: "Sonic is pleased to enhance our premier US equity trading technology with Reuters leading global market access to expand its connectivity beyond the United States by offering customers access to some of the world's most liquid markets.
This agreement with GL TRADE will allow Sonic to expand its connectivity beyond the US and offer our customers access to some of the world's most liquid markets," said Joe Cammarata, Founder and Managing Director of Sonic Financial Technologies.