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liquidity risk

 - 2 dictionary results
Financial Dictionary

Liquidity Risk

The risk stemming from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss.

Investopedia Commentary

Usually reflected in a wide bid-ask spread or large price movements.

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The Nitty-Gritty Of Executing A Trade

See also: Country Risk, Liquidity Cushion, Political Risk, Price Risk, Reinvestment Risk, Risk, Risk Averse, Risk/Return Tradeoff, Spread, Systematic Risk, Unsystematic Risk

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Financial Dictionary

liquidity risk

The risk of having difficulty in liquidating an investment position without taking a significant discount from current market value. Liquidity risk can be a significant problem with certain lightly traded securities such as unlisted options and municipal bonds that were part of small issues. Also called marketability risk.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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