What is difference between liquid and illiquid stocks?

Illiquid: Security which cannot be converted into cash easily is called illiquid.

Liquid: Security which can be easily converted in to cash is called liquid.

Illiquid stocks:

Stock which have less volumes or less buyers and less seller are called illiquid stocks, since volumes are less you can’t convert these stock in to cash easily since buyer will be less.

Liquid stocks:

Stocks which have good volumes or more buyers and sellers are called liquid stocks, since volumes are high you can convert these stocks in to cash easily, because buyers will be readily available.

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Liquidity is all about how easy something is to sell.

If there is a market for an Asset, and the Asset can be easily sold, then the asset is said to be “liquid”.

An example of a “liquid asset”? Shares in Microsoft. Even if you owned a million shares of Microsoft, you could easily sell the entire position tomorrow without any hassle.

Illiquid assets cannot be easily converted to cash often because there is not an active market full of people who will buy your asset at a moment’s notice.
The best example is a house. If you own a house, and you decide that you no longer want it, it may take months to find a seller. Now, it’s entirely possible that you can simply lower your demands and take whatever amount of cash someone offers you in return for your asset.

Note:Illiquid stocks normally traded in BE(trade for trade) category.