Why is the liquidity of a share so important?

Liquidity in the stock market refers to how much demand there is for a share. This is positive for existing shareholders, as high demand makes it possible to sell shares for cash at any time. Liquidity can already be created through the improved legal transferability of shares, e.g. through shares that can be held in a securities account. Further steps are then discretionary or, even better, regulated trading. In addition, the company can increase liquidity by focussing more on shareholder and analyst loyalty.

All FAQs Published at: 2024-02-05