Liquidity

1.  The liquidity of a particular stock or security refers to how many shares are moving in and out on a daily basis. Liquidity is characterized by a high level of trading activity. Assets that can by easily bought or sold, are known as liquid assets.

2. The ability to convert an asset to cash quickly. Also known as “marketability”.

Securities with higher liquidity are safer because it is easier for investors to take their money out.