Other attributes
Liquidity is an indicator that reflects the ability to convert any available asset without changing its market price into cash. Liquidity reflects the speed with which an asset can be quickly bought or sold in the market at a price reflecting its real value.
According to the definition, cash is the most liquid of assets, while tangible assets such as real estate, luxury goods and others are much less liquid. Other financial assets, from stocks to complex production financial instruments, vary in the liquidity spectrum when rated.
The stock market, characterized by high liquidity when there is plenty of trading volume and supply and demand equilibrium, allows the price a buyer offers for a stock (the purchase price) and the price a seller is willing to accept (the sale price) to hold fairly close to each other. In a less liquid market situation, the difference between the buy and sell prices increases and the number of active bidders tends to decrease.
Considering shares as a class, it is customary to define them to the most liquid assets. However, not all shares have the same level of liquidity: some are traded on stock exchanges more actively than others, which directly affects the ability of the asset to turnover (convert it into cash). In other words, they attract more and constant interest from traders and investors.
