Liquidity refers to the ability to sell a bond quickly and at an efficient price, as reflected in the bid-ask spread.
If there is a large difference between the prices buyers are bidding, and the prices sellers are asking, there may not be the opportunity for a quick sale.
There is always a ready market for U.S. treasuries, but there may not always be for some corporate bonds, due to a thin market with few buyers and sellers.
#liquidity #risk #bonds #treasuries
Wealth Management Services are offered through Baldwin & Clarke Advisory Services, LLC (BCAS). BCAS is a Registered Investment Adviser with the United States Securities and Exchange Commission (SEC). BCAS’ Form CRS and other disclosure documents can be found here. The information in this website has not been approved or verified by the SEC, or by any state securities authority. Additional information about BCAS is available on the SEC’s website at: www.adviserinfo.sec.gov, using CRD #105666.
Registration does not imply a certain level of skill or training.
