Definition
Liquidity describes how easy it is to trade a stock in the market. A stock with high liquidity has many buyers and sellers — you can buy or sell large positions without significantly affecting the price. An illiquid stock can be difficult to sell quickly.
High liquidity
Equinor, DNB, Telenor. Millions of shares traded daily. You can buy and sell whenever you want at market price.
Low liquidity
Small companies on Oslo Axess. Perhaps only a few thousand shares traded daily. Difficult to sell quickly without pushing the price down.
Liquidity trap: It can be easy to buy an illiquid stock — but extremely difficult to sell it quickly if something goes wrong.
"Freedom in investing is the ability to act when you want — not when you must. Liquidity is this freedom."— Florence Scovel Shinn