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Liquidity period: Difference between revisions
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{{def|Liquidity period|/lɪˈkwɪdɪti ˈpɪərɪəd/|n|}}Of an [[ | {{def|Liquidity period|/lɪˈkwɪdɪti ˈpɪərɪəd/|n|}} | ||
Of an [[financial instrument]], the ''shortest'' period which an investor, or counterparty, is ''stuck'' with it. In the liquidity period one is at risk to your asset cratering into a sulfurous hole in the ground, so it is an issue that should exercise an investor’s mind far more than, in most cases, it does. | |||
For a [[stock]], you can sell it at any time, so the liquidity period is close to nil. UCITS funds are likewise poretty liquid. Some alternatives — [[hedge fund]]s, [[private equity]] — that kind of thing — may only accept [[Subscription|subscriptions]] and [[Redemption|redemptions]] every quarter (or an even longer period). | For a [[stock]], you can sell it at any time, so the liquidity period is close to nil. UCITS funds are likewise poretty liquid. Some alternatives — [[hedge fund]]s, [[private equity]] — that kind of thing — may only accept [[Subscription|subscriptions]] and [[Redemption|redemptions]] every quarter (or an even longer period). | ||