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By definition a stock is not a liquid asset. It needs to be sold first. In order to be sold, you need a buyer. You don't always have a buyer.
by chrismcb 5y ago
By definition a stock is not a liquid asset.
It needs to be sold first. In order to be sold, you need a buyer. You don't always have a buyer.
- throw0101a 5y ago> By definition a stock is not a liquid asset. "By definition"? Which definition are you using? Liquidity exists on a spectrum and is not binary: > In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the price at which an asset can be sold, and how quickly it can be sold. In a liquid market, the trade-off is mild: one can sell quickly without having to accept a significantly lower price. In a relatively illiquid market, an asset must be discounted in order to sell quickly.[1][2] * https://en.wikipedia.org/wiki/Market_liquidity https://en.wikipedia.org/wiki/Market_liquidity
- jonny_eh 5y agoAnd yet I had to pay tax for exercising stock options from a startup I left, stocks I was never allowed to sell since the company was private.
- HWR_14 5y agoThe stock market converts stock into a (more) liquid asset. The value of GOOG may vary day to day, but no one thinks that it's difficult to turn shares into cash.
- RhysU 5y agoTurning oodles of shares into cash at the prevailing price, without pushing the price adversely, is quite a trick. "Slippage" is how to research this concept.
- HWR_14 5y agoWho suddenly needs $3 billion out of the blue? Because Bezos regularly cashes in over a billion each quarter. Is that not enough to maintain a lifestyle? But if he wants to buy a sports team, he can probably pay directly in AMZN stock as a private transaction (well, except for possible SEC regulations.)