DEMO — development content for layout testing. Not real editorial reporting.
DEMO content for development and layout testing — not real editorial reporting.
Market liquidity depends on how many buyers and sellers are active, how much intermediaries are willing to hold on their balance sheets, and how transparent prices are.
How it works
In calm periods, tight bid-ask spreads can make markets look deep. Under stress, intermediaries may step back, and many investors may try to sell at once.
A liquid market lets investors trade quickly without moving prices much. That quality can change abruptly under stress.
What to watch
Regulators and central banks monitor liquidity because sudden evaporation can turn a price adjustment into a disorderly market.
Key concepts
- Liquidity
- Market structure
