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Liquidity

Market Structurebeginner
Updated 1/15/2024

Definition

Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price. High liquidity means tighter spreads and easier execution, while low liquidity can lead to slippage.

Example

EUR/USD has high liquidity with tight spreads, while exotic pairs like USD/TRY have lower liquidity with wider spreads.

Tags

#market-structure#execution#spreads
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