Market liquidity

In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the price at which an asset can be sold, and how quickly it can be sold. In a liquid market, the trade-off is mild: one can sell quickly without having to accept a significantly lower price. In a relatively illiquid market, an asset must be discounted in order to sell quickly.^[1][2] A liquid asset is an asset which can be converted into cash within a relatively short period of time,^[3] or cash itself, which can be considered the most liquid asset because it can be exchanged for goods and services instantly at face value.^[1]