An ETF that has millions of shares and traded on a "minute-base" is higly liquid. An ETF that has only 40 shares is more difficult to trade and thus has low liquidity
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Liquidity is important because it
1) Lowers Is Trading Costs (tighter bid-ask spreads),
2) makes easier Entry & Exit (buy and sell due to high availability and demand) and
3) makes pricing more accurate (keeps ETF prices aligned with the NAV
Comments
1) Lowers Is Trading Costs (tighter bid-ask spreads),
2) makes easier Entry & Exit (buy and sell due to high availability and demand) and
3) makes pricing more accurate (keeps ETF prices aligned with the NAV
#ETF #stockmarket #investing #wealth