Highly
liquid stocks are stocks that may be exchanged for cash on a very short notice.
They are typically associated with stocks that are traded in high frequencies
and high volumes. As a result, such types of investment are ideal for those who
are interested in speculative trading, and may also offer some advantages
during investment portfolio creation. It is very important that you put some of
your investment in liquid stocks so that in case of an emergency you could
avail cash easily by trading the liquid stocks.
i.
You can decide to trade in your own time frame:
A major benefit of trading in a liquid market is
that the most liquid market, foreign exchange, is open 24 hours a day except
for weekends. You can decide to trade in your own time frame, after work,
before you go to work or even at work.
ii. More trading opportunities:
Another
benefit from trading in liquid markets is volatility. When a price fluctuates
as it does in a liquid market more trading opportunities are available. If you
buy an asset and its price doesn’t move there is little or no opportunity to
make a profit.
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