liquidity
Americannoun
-
the possession of sufficient liquid assets to discharge current liabilities
-
the state or quality of being liquid
Etymology
Origin of liquidity
From the Latin word liquiditās, dating back to 1610–20. See liquid, -ity
Explanation
Liquidity refers to a state where something is in liquid form, like water. It can also refer to having cash or access to cash. Liquidity means things are flowing. Although liquidity refers to…surprise! being a liquid, it’s usually used in a financial sense. Financially, liquidity refers to having access to cash or things you can sell and turn into cash. In other words, you have good cash flow. Liquidity can also apply to any situation that is marked by fluidity or runniness. You hope your new swimming pool is in a state of liquidity, and that you have enough financial liquidity to pay for it!
Vocabulary lists containing liquidity
Personal Finance and Financial Literacy - High School
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Economics
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Personal Finance and Financial Literacy - Middle School
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Example Sentences
Examples are provided to illustrate real-world usage of words in context. Any opinions expressed do not reflect the views of Dictionary.com.
Maintaining liquidity and flexibility — particularly in the first decade or so of retirement when your “sequence-of-returns” risk is high — can be more valuable than eliminating debt.
From MarketWatch • Apr. 15, 2026
Although uncertainty and volatility have been high, investors haven’t yet exited markets altogether, avoiding the liquidity stress that can lead to a downturn.
From Barron's • Apr. 14, 2026
Many institutional investors finance portions of their portfolios with leverage or liquidity facilities provided by banks.
From MarketWatch • Apr. 13, 2026
Many are structured much like mutual funds, but with far less liquidity and fewer chances for investors to pull out.
From The Wall Street Journal • Apr. 11, 2026
“Bear was able to show us liquidity in the CDOs that I couldn’t understand,” said Ben.
From "The Big Short" by Michael Lewis
Definitions and idiom definitions from Dictionary.com Unabridged, based on the Random House Unabridged Dictionary, © Random House, Inc. 2023
Idioms from The American Heritage® Idioms Dictionary copyright © 2002, 2001, 1995 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company.
