Liquidity measures the ease with which an investor can buy or sell an asset. Think of liquidity in the scope of swimming. The more liquid the water, the easier it is to dive in without getting hurt. However, the less liquid, the less inclined you will be to dip your toes in the water.
By using the most liquid underlyings when trading and investing we can achieve a greater advantage in getting in and out trades. Most liquid tradable underlyings exhibit following characteristics:
Here's some of the most liquid ETFs and stocks with average daily volume (20 days) of over or just about 1 million shares per day:
Eighteen-year old trader, future connoisseur of options.
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