Liquidity
How easily you can enter or exit size without moving the market.
Definition
Liquidity describes market depth and the cost of trading. Thin books mean higher slippage, sharper wicks, and harder exits when narratives break.
Why researchers care
- A beautiful thesis dies if you cannot exit.
- Check venues, depth, and volume relative to market cap.
- Meme and microcaps fail liquidity tests first.
Related terms
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