Finance Questions

Posts Tagged ‘liquidity day’

Liquidity Day is used to ensure that any trading will not affect or move the market. Big companies often liquidate a large amount of securities, whether it be stocks, bonds or mutual funds. If a company liquidates a large amount of securities in one day, it could move the market.

For example, a company may only be allowed to liquidate 10% of their holding position a day in order to not move the market.

Note:

When calculating liquidity day, use the median volume.