Definition
How easily something can be bought or sold quickly without moving its price much.
The story
ES (E-mini S&P 500 futures) is one of the most liquid markets in the world: at most hours you can trade many contracts with barely any effect on the price, and the gap between buyers and sellers is usually a single tick. A thinly traded stock is the opposite: a modest order can push the price around. In Fed coverage, "liquidity" can also mean how much cash is flowing through the financial system.
Why markets watch it
Liquidity affects costs, slippage and how fast prices can jump, which is why it often thins out around holidays and overnight.
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We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms