Liquidity in the stock market refers to the ease and speed with which an asset or security can be converted into cash without affecting its market price. In other words, it describes the degree to which an asset can be quickly bought or sold in the market at a price reflecting its intrinsic value. Cash is considered the most liquid asset because it can be most quickly and easily converted into other assets.

Market liquidity refers to the extent to which a market, such as a countrys stock market, allows assets to be bought and sold at stable, transparent prices. A stocks liquidity generally refers to how rapidly shares of a stock can be bought or sold without substantially impacting the stock price. Stocks with high liquidity are typically the easiest to sell, while stocks with low liquidity may be difficult to sell and may cause investors to take a bigger loss if they cannot sell the shares when they want to.

Liquidity risk is the risk that investors wont find a market for their securities, which may prevent them from buying or selling when they want. This risk is higher for complex investments or investment vehicles like CDs that may charge penalties to liquidate or access funds early.

In summary, liquidity in the stock market refers to the ease and speed with which an asset or security can be converted into cash without affecting its market price. Market liquidity refers to the extent to which a market allows assets to be bought and sold at stable, transparent prices. A stocks liquidity generally refers to how rapidly shares of a stock can be bought or sold without substantially impacting the stock price. Liquidity risk is the risk that investors wont find a market for their securities, which may prevent them from buying or selling when they want.