why are some stocks more liquid than others 
the most liquid stocks tend to be those with a great deal of interest from various market actors and a lot of daily transaction volume such stocks will also attract a larger number of market makers who maintain a tighter two sided market illiquid stocks have wider bid ask spreads and less market depth these names tend to be lesser known have lower trading volume and often have lower market value and volatility thus the stock for a large multinational bank will tend to be more liquid than that of a small regional bank the bottom lineliquidity is the ease of converting an asset or security into cash with cash itself being the most liquid asset of all other liquid assets include stocks bonds and other exchange traded securities tangible items tend to be less liquid meaning that it can take more time effort and cost to sell them e g a home market liquidity and accounting liquidity are two main classifications of liquidity and financial analysts use various ratios such as the current ratio quick ratio acid test ratio and cash ratio to measure it having liquidity is important for individuals and firms to pay off their short term debts and obligations and avoid a liquidity crisis 