The essentials2 min read
LiquidityGerman: Liquidität
Liquidity describes how quickly an asset can be converted into cash at a reasonable price. For people and companies, it also refers to the ability to pay obligations.
In plain language
An active market makes selling easier. Thinly traded securities can involve large price discounts or delays. Even normally liquid markets can become illiquid during a crisis.
Let’s make it concrete
A listed stock can often be sold quickly. A property usually takes much longer before the money reaches your account.
Simplified example for illustration.Worth understanding
A high stated asset value does not mean you can access the money immediately.
Read more from official sources
For further learning and reference:
Financial education for orientation. No individual investment, tax or legal advice.
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