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> Think about what makes a share liquid: lots of potential buyers You don't need lots of potential buyers for liquidity, only one for what you're trying to sel
by adventured 7y ago
> Think about what makes a share liquid: lots of potential buyers
You don't need lots of potential buyers for liquidity, only one for what you're trying to sell. It's why very low volume secondary markets can function and provide liquidity.
A lot of people will also obviously invest into things even when they do not consider them safe investments. If the potential return is thought to be high enough, large numbers of people will routinely invest into unsafe investments with full awareness that it's at least somewhat dangerous (whether stocks, crypto, real-estate, schemes, etc).
- brankoB 7y agoI get what you're trying to say but having multiple potential buyers is literally the definition of liquidity. If you only have one for what you're trying to sell then it's very easy for someone else to sell their share and boom you can't get rid of yours. These secondary markets work because there's a low amount of buyers AND sellers but if there would happen to be a sudden surge in sellers then the low liquidity of the market would eventually show itself.