Robinhood Learn
To understand liquidity, think about water. Water is a liquid that’s ready to drink. But you can’t drink an ice cube as it is. You have to wait for it to melt. Similarly, cash is liquid but if you own a house, you need to sell it to have cash.
What is Liquidity?
To understand liquidity, think about water. Water is a liquid that’s ready to drink. But you can’t drink an ice cube as it is. You have to wait for it to melt. Similarly, cash is liquid but if you own a house, you need to sell it to have cash.