OptionAutomator Options Trading Glossary:

Definition, Examples & Resources:Liquid / Liquidity'

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What is Liquid / Liquidity in Options Trading ?

Liquid / Liquidity
The characteristic of high volume of trades in an option so as to be able to easily square of any held position in that option at reasonable market price. Volume and the width of the bid-ask spread are good idications of overall contract liquidity.




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