Illiquid

A term that refers to an asset or security that is not easily exchangeable for cash. This may include real estate, collectibles or shares in a privately-held company. Illiquid assets are generally regarded as being riskier than liquid assets as the owner cannot sell them as easily, and may incur a large loss  when trying to sell quickly.

Some securities that are lightly traded are also known to be illiquid. Generally, illiquid securities have higher bid-ask spreads which makes it more costly for the trader/investor to trade the security. For larger investors, they may find themselves unable to sell their shares without causing a significant drop in the stock price.

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