A market that is liquid has lots of potential buyers and sellers, as well as relatively low transaction costs. Depending on the asset being traded, specifics regarding what makes a Liquid Market may change. A trade can be completed quickly and at a favourable price in a liquid market because there are many buyers and sellers, and the product being traded is standardised and in high demand. Even though supply and demand fluctuate on a daily basis in a liquid market, the difference between what a buyer wants to pay and what a seller will accept remains relatively small.Liquid stocks or securities are generally considered to be stocks that trade easily and for which there is a constant demand from buyers in the stock market The opposite of liquid, illiquid is usually used to describe a business or industry that has difficulty in meeting the financial obligations to their creditors. In finance, liquidity describes how easily an asset can be traded for cash without affecting the underlying value of the asset.
