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Topic

liquidity

A collection of 52 issues

What Is a Liquid Net Worth vs Total Net Worth?

Understanding Net Worth at a Glance When people talk about personal wealth, they often default to discussing salary, home value, or investment balances. While those numbers are useful, none of them captures the whole picture the way net worth does. Net worth represents the difference between what you own and

What Is a Company’s Float and Why It Matters?

Introduction The term "company float" often appears in stock screeners, financial news, and analyst reports, yet many new investors gloss over it. Understanding float is critical because it tells you how many shares are truly available for trading in the open market. A stock can have millions of

What Is the Bid–Ask Spread in ETFs?

Introduction Exchange-traded funds (ETFs) are celebrated for their low costs, intraday liquidity, and tax efficiency, but there is an often-overlooked cost that can quietly erode returns: the bid–ask spread. Understanding how the bid price and ask price converge to form this spread, and why it varies from one ETF

Understanding the Order Book: Definition, Components & Trading Advantages

Introduction The order book is the beating heart of every modern trading platform, yet many newcomers overlook its crucial insights. Whether you buy Bitcoin, shares, or commodities, mastering the order book can sharpen entries, exits, and overall strategy. By visualizing real-time demand and supply, the tool reveals where price pressure

Operating Cash Flow: The Lifeblood of Business Finance

Understanding Operating Cash Flow Operating cash flow (OCF), sometimes called cash flow from operations, measures the cash generated by a company’s core business activities during a specific period. Unlike net income, which includes non-cash items, OCF focuses purely on real money moving in and out of day-to-day operations. Healthy

Understanding the Money Market: A Safe Haven for Short-Term Investors

What Is the Money Market? The money market is a segment of the financial system where governments, banks, and corporations trade short-term debt instruments with maturities of one year or less. Treasury bills, certificates of deposit, commercial paper, and repurchase agreements are the most common securities. Because these instruments are

What Is a Market Maker? Role, Risks & Benefits Explained

What Is a Market Maker? A market maker is a licensed participant on a securities or cryptocurrency exchange that continuously posts both buy and sell quotes for a specific asset. By committing its own capital, the market maker ensures that other traders can instantly enter or exit positions without waiting

What Is Market Depth? A Trader's Guide to Order Book Liquidity

Understanding Market Depth Market depth, often visualized through the order book, reveals the quantity of buy and sell orders waiting at different price levels. By examining depth, traders can gauge the liquidity of an asset and anticipate how large orders may influence price movements. A deep market features plentiful bids

Understanding Illiquidity: What It Means for Investors

What Is Illiquidity? Illiquidity refers to the difficulty of buying or selling an asset quickly without significantly moving its price. When a market lacks willing buyers or sellers, transactions slow and bid-ask spreads widen. Assets such as real estate, thinly traded stocks, collectibles, and some corporate bonds commonly exhibit higher

What Is an Electronic Communication Network (ECN)? A Trader’s Guide

Understanding Electronic Communication Networks An Electronic Communication Network (ECN) is a computerized system that directly matches buy and sell orders for securities in the financial markets. Unlike traditional dealing-desk models, ECNs connect individual traders, institutional investors, and liquidity providers in a transparent, real-time environment. Because orders interact without dealer intervention,