What Is Illiquid Stock English

What Is Illiquid Stock?

An illiquid stock has a low trading volume, making it difficult to buy or sell without affecting its price significantly. These stocks often have limited market participants and might not have frequent price updates, resulting in wider bid-ask spreads.

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Illiquid Stock Meaning

Illiquid stock refers to shares that are not traded frequently on the stock market. This lack of regular trading activity leads to wider spreads between bid (buy) and ask (sell) prices, making it challenging to execute large orders without impacting the stock’s price.

Illiquid stocks are characterized by low trading volumes, meaning fewer shares are bought and sold in the market. This infrequent trading can result in limited price movement over time.

Due to their low liquidity, these stocks often have larger spreads between bid and ask prices. This makes buying or selling these stocks at desired prices more difficult