TRADING GLOSSARY
Liquidity risk
Liquidity risk is the possibility that a position cannot be opened or closed promptly at a reasonable price because there are too few willing buyers or sellers. It can lead to wider spreads, partial fills, or greater slippage, especially during market disruptions.
EXAMPLE
In a hypothetical thinly traded currency market, a trader submits a sell order but receives a lower price because few buyers are available.
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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure