What are Illiquid stocks?
5paisa Research Team
Last Updated: 30 Nov, 2022 01:20 PM IST

Content
- Introduction
- What is illiquid stock?
- How to identify illiquid stocks?
- How do I buy illiquid stocks?
- Conclusion
Introduction
The liquidity of an asset is its ability to be converted into cash. Therefore, illiquidity is the opposite of liquidity. Some assets are classified as liquid assets, whereas others are illiquid assets. Thus, liquid assets are more valuable as they can be easily converted to cash if required. Illiquid assets can pose difficulty in such situations.
Sometimes illiquid assets have high value, but converting them into cash may take a long time. A suitable example of this is real estate. Although it is one of the most favoured modes of investment, its liquidity is comparatively lesser compared to other assets like equity listed on an active stock exchange.
This article explains illiquidity, illiquid stocks, the meaning and their examples, and how to identify and buy illiquid stocks.
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.