Market liquidity concerns the cost and time required to buy or sell an asset for cash, including how much trading moves its price. Market liquidity concerns trading assets; it is distinct from funding liquidity, which concerns the ability to raise cash funding, although the two can interact.
ReviewedEvidence1 sourceSectionPhrases & Idioms
Quick answer
Market liquidity concerns the cost and time required to buy or sell an asset for cash, including how much trading moves its price.
Key details
Canonical Formmarket liquidity
Core MeaningMarket liquidity concerns the cost and time required to buy or sell an asset for cash, including how much trading moves its price.
Further guidance
History Boundary
Current authoritative financial meaning is published without claiming an exact inventor, coinage date, or absolute first use.
Meaning
Market liquidity concerns the cost and time required to buy or sell an asset for cash, including how much trading moves its price.
Usage Boundary
Market liquidity concerns trading assets; it is distinct from funding liquidity, which concerns the ability to raise cash funding, although the two can interact.
Sources and evidence
Sources are shown with the role they play in this guide. Historical or style-sensitive claims are kept within the evidence boundary described above.
A “bear market” is a period in which financial-market investments are generally falling in value. The dictionary definition does not require one universal percentage threshold, so do not make a fixed numeric cutoff part of the core meaning.
Consolidated Market Data is a current Regulation NMS defined term for enumerated data consolidated across national securities exchanges and associations.
Consolidated Market Data Product is a current Regulation NMS defined term. This guide preserves the specific U.S. securities-rule scope instead of substituting an ordinary-language meaning.
A crossed market occurs when the best bid to buy is higher than the best offer to sell. A crossed market is distinct from a locked market and can make an NBBO unreliable for some execution-quality calculations; do not use the terms interchangeably.
A national market system plan approved by the Securities and Exchange Commission, temporarily or permanently, pursuant to § 242.608. Keep the approval and § 242.608 scope in the definition; this is not a generic label for any market-system operating plan.
Under current U.S. Regulation NMS, an “exchange market maker” is a member of a national securities exchange registered as a specialist or market maker under that exchange’s rules. Keep this definition tied to the Regulation NMS rule text; it does not define every market-making role outside that regulatory context.
Funding liquidity is the ability of a financial institution or market participant to obtain cash funding, including through secured or unsecured borrowing. Funding liquidity concerns the ability to raise cash funding; it is distinct from market liquidity, which concerns trading assets without large price effects, though the two can interact.
