Liquidity

Assets with high liquidity can be bought and sold quickly and easily, while assets with low liquidity may take longer to sell or may require a larger price adjustment in order to find a buyer.

Highly liquid markets tend to be more efficient and transparent, as prices are readily available and there is generally a lower level of risk associated with trading. They also tend to offer lower transaction costs, as bid-ask spreads are narrower and there is generally more competition among buyers and sellers.

Low liquidity markets can be more illiquid and subject to large price swings, particularly in times of market stress or uncertainty.

This can make it more difficult for traders to find buyers or sellers for their positions and can result in larger bid-ask spreads and higher transaction costs.