Glossary · L
What is Liquidity?
How easily you can trade a meaningful size without moving the price much; in practice, the resting size near the current price and the speed with which it is replenished.
In context
Liquidity is one of the most used and least understood words in trading. A widely used definition comes from Larry Harris's book Trading and Exchanges. In essence, liquidity is the ability to trade a large size, quickly, at low cost, whenever you want to.
Learn it in depth
- Chapter 1: The Gold Futures Contract and the Trading Day
- Chapter 10: Liquidity, the Order Book and the Tape
Every term in context, with real gold examples: the free 301-page eBook.
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