PortWhat is liquidity?
The ease of buying or selling an instrument without affecting its price.
Explanation
It is usually measured by average daily trading volume and spread width. High liquidity means that an order will be executed close to the last price.
For companies with low liquidity, even attempting to sell a larger position can drive the share price down by several percent. This is a risk not reflected in any valuation metric.
Example
With a daily trading volume of 200K PLN, selling a block of shares worth 100K PLN represents half of the entire day's trading — it's unlikely to happen without driving down the price.
Related Terms
See Liquidity live
Portevo displays this and dozens of other metrics for specific companies, along with an earnings calendar and your portfolio.
Portevo is not an investment advisor. The data and analyses are for informational and educational purposes only and do not constitute a recommendation or an offer to buy or sell financial instruments. Quotes are from external providers and may be delayed. You make investment decisions at your own risk.
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