5. Liquidity Flashcards
1
Q
Liquidity is described as?
A
How easy it is to trade without moving the market price significantly, or incurring significant costs
2
Q
Liquidity markets can be described as?
A
Deep
3
Q
Spreads in a liquid market as described as wide, or narrow?
A
Narrow
4
Q
How can liquidity be quantified? By which two indicators?
A
1.Volume of trades in a specific period
2. Number of cumulative open positions (‘open interests’).
