Illiquid

Definition:

In the context of corporate finance, the absence of cash flow needed to fulfill financial debts and meet obligations. In the context of investments, describes a thinly traded investment such as a stock or bond that is not easily converted into cash. Illiquid securities have high transactions costs. Often the bid-ask spread is very wide.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Naked option strategies

An unhedged strategy making exclusive use of one of the following: Short call strategy (selling or writing call options), and short put strategy (selling or writing put options). By themselves, these... Read More

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