Liquid Market

A liquid market a market with many available buyers and sellers and comparatively low transaction costs. The details of what makes a market liquid may vary depending on the asset being exchanged. In a liquid market, it is easy to execute a trade quickly and at a desirable price because there are numerous buyers and sellers and the product being exchanged is standardized and in high demand. In a liquid market despite daily changes in supply and demand the spread between what the buyer wants to pay and what sellers will offer remains relatively small. The opposite of a liquid market is called a thin market or an illiquid market. Thin markets may have considerably large spreads between the highest available buyer and the lowest available seller.