What does liquidity mean?
The availability of an asset to be bought and sold easily, without affecting its market price.
Markets can also be referred to as liquid or illiquid, depending on trading volume and the stability of the overall market prices. Cash is considered to be the most liquid assets, while collectibles, art and real estate are all fairly illiquid as it can be difficult to find a buyer at a desirable price. Liquidity can and does affect the ability to get in and out of a trade, and needs to be taken into account when purchasing any asset.