Liquid Market

A market is said to be liquid if it has a large number of buyers and sellers and relatively cheap transaction costs. Depending on the item being traded, specifics on what makes a market liquid may alter. A deal may be completed quickly and at a favorable price in a liquid market because there are many buyers and sellers, and the commodity being traded is standardized and in great demand. Despite daily variations in supply and demand, the difference between what a buyer wants to pay and what a seller is willing to provide is typically rather minimal in a liquid market.