Glossary Detail: Liquidity
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How easily a security can be bought or sold without significantly impacting its price. Higher liquidity = tighter spreads and more reliable signals.
Further Details:
Liquidity refers to how easily and quickly a security can be bought or sold at a price close to its fair market value. Highly liquid securities (AAPL, SPY) have tight bid-ask spreads and deep order books. Illiquid securities have wide spreads and thin order books.