Glossary

How many people are waiting on the other side. Low liquidity is a permanent, recurring cost.

The first filter, and it removes most of the market without any judgement required.

Where the rain has collected. Large participants move price into it because that is the only place size is available.

A quoted price with a handful of daily trades behind it is not a price you can transact at in size. Combine that with tight circuit limits and a bad announcement leaves you locked in for consecutive sessions.

Read it as an evacuation plan rather than a weather forecast. It does not say a fire is coming; it says how long the building takes to empty, which is a fact about the building and was measurable the whole time.

Break on volume, no close beyond, quick reclaim. A genuine breakdown holds; consuming a pool of stops does not.

A flat can take months to sell, and longer in a bad market. That is not a small footnote — it is the main risk of property.

The one place a company sets out, in its own words, what the next twelve months demand in cash. Because it is undiscounted it will not tie to the balance sheet, and that is the design rather than an error.

It tells you how few decisions it would take to produce a large redemption. A fund whose top holders own a big slice can face an exit that no retail pattern would ever generate.

Driven mostly by fund size measured against the volumes of what it owns, so the numbers cluster by size rather than by skill. The least liquid fifth of the portfolio is excluded before the figure is calculated, which is the single most important thing to know about it.

SEBI has repeatedly flagged inflated subscription figures, circular funding of applications and post-listing manipulation here. Good companies do list; the base rate is not favourable.

Treating an ordinary undrawn limit as cash is the commonest error in a liquidity schedule. Run the test with it at zero, then note the headroom separately.

It leaves solvency untouched and hands liquidity to somebody else to decide. A company can be worth far more than it owes on every valuation and still fail on a date.

The distinction decides whether an undrawn limit belongs in a liquidity schedule at all. Most ordinary working capital limits in India are not committed, and a company that has arranged one will say so.

Stops cluster just past obvious levels, which makes them a tempting pool of liquidity.

The shares that genuinely trade. It determines liquidity and index weight.

For size in mid-liquidity names, so you consume the book gradually rather than all at once.

Usually arrives after a stock has already run, because coverage follows liquidity and client interest rather than opportunity.

The simplest of the three routes abroad. Liquidity can be thin, and the price sometimes trades at a noticeable premium to what it holds.

The genuine bull case for an SME holding — better liquidity, wider coverage, index eligibility. It is also uncommon and slow, so it is not something to rely on when you buy.

It needs thin liquidity to work. A loud tip on a stock with tiny turnover means you are the exit.

The stricter liquidity test — because unsold stock in a downturn is exactly what you cannot convert to cash.

The hidden tax on impatience. It grows with order size and shrinks with liquidity.

Everything else, from future compounders to shells. Thin liquidity and brutal drawdowns.

A given strike in a given expiry is a distinct instrument with a start date and an end date. The same strike number next month is a different contract with different time remaining and different liquidity.

Not available to an Indian equity scheme meeting redemptions. Its absence is why a manager under liquidity pressure reaches instead for the blunter tool of limiting the money coming in.

Both ends hold most of the day's information and most of its danger. The first fifteen minutes are the most expensive; the close has the deepest liquidity.

Not the same as the money being lost. In a liquidity failure the bonds are sound and cannot be sold this week; in a credit failure the borrower cannot pay at all. On the day, both look like a blocked redemption.