Investment Jargon: Liquidity​


The time taken to buy and sell an asset. This can range from milliseconds to years. Generally the rough ranking of liquidity would be: currency markets and shares tend to be most liquid, then developed market government bonds, then investment grade corporate bonds, then high yield bonds​, then property. Low liquidity drives up the cost of trading, increasing the difference between buying and selling prices. In markets where there are exchanges and market makers liquidity is highest.