Illiquid

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Related to Market liquidity: liquid assets

Illiquid

In the context of corporate finance, the absence of cash flow needed to fulfill financial debts and meet obligations. In the context of investments, describes a thinly traded investment such as a stock or bond that is not easily converted into cash. Illiquid securities have high transactions costs. Often the bid-ask spread is very wide.

Illiquid

Describing an asset that is difficult to sell because of its expense, lack of interested buyers, or some other reason. Examples of illiquid assets include real estate, stocks with low trading volume, or collectibles. Illiquid assets still have value and, in many cases, very high value but are simply difficult to sell. See also: Liquid.

illiquid

1. Of or relating to an asset that is difficult to buy or sell in a short period of time without its price being affected. For example, a large block of stock or a small amount of an infrequently traded stock is likely to be difficult to sell without a reduced price being offered to potential buyers. Compare liquid.
2. Of, relating to, or being an investment position in which a low proportion of assets is in cash or near-cash, thereby creating difficulty for the investor who is trying to raise funds for another purpose.
References in periodicals archive ?
Research examining liquidity has highlighted three key drivers of changes in market liquidity in recent years: more stringent regulation, changes in market structure and extraordinarily loose monetary policy.
The reforms have been intended to create a more resilient banking sector, but these might also have had some consequences for market liquidity.
The overall reduction in market-making capacity is seen as reducing both the level and resilience of market liquidity.
Increased regulation has also had positive implications for market liquidity.
However, new trading strategies can lead to disruptions in market liquidity in the face of shocks.
Market liquidity is improved through lower costs of market making and trading.
New Zealand government bond market liquidity is important for the functioning of domestic financial markets, as many other market interest rates are set in relation to bond rates.
Thus the implications of changes in trading activity for market liquidity are not always clear.
The bid-ask spread is a commonly used measure of market liquidity to indicate tightness in the market (i.
All told, our indicators of bond market liquidity give mixed results, with the number of transactions, bond turnover and bond spreads indicating no deterioration in liquidity, at least in the nominal market.
While different participants shared different perspectives on New Zealand government bond market liquidity, some aspects were agreed on.
The greatest concern we heard from market participants around bond market liquidity came from the market makers, with most suggesting that liquidity had declined in recent years.