Liquidity
How easily a stock can be bought or sold without moving its price — high-volume, tight-spread names are the most liquid.
Liquidity is a function of volume and the bid-ask spread. A liquid stock trades millions of shares a day with a penny spread, so you get filled near the quoted price; an illiquid one can gap on small orders and is costly to enter and exit.
Liquidity matters for risk: a thin, low-float name can move violently and trap you in a position you can't exit at a fair price. Most traders set a minimum average-volume and price filter to stay in tradable names.
On StockSetups
StockSetups' admin filters and screener let you set minimum average-volume and price thresholds, and the board sorts the universe most-liquid-first so you focus on names you can actually trade.
Related terms
See liquidity on tonight's board.
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