The liquidity of a security is the ease with which it can be bought or sold without moving its price. It does not show on a price chart — and yet it is what determines, at the moment of selling, the difference between the price displayed and the price actually obtained.
The two faces of liquidity
The bid-ask spread
At every moment, the order book shows a best buyer and a best seller (see the article on where a stock price comes from). The space between the two is the bid-ask spread. It measures simply:
- heavily traded security: for example $50.00 / $50.01 — a one-cent spread, 0.02%;
- lightly traded security: for example $4.80 / $5.20 — a 40-cent spread, 8%.
That spread is an implicit transaction cost: buying at the seller's price then immediately selling at the buyer's price would lose the spread, without the "quote" having moved at all.
Volume
Volume — how many shares trade per day — measures the depth of the market. It determines the order size the book can absorb without the price moving away. Selling 100 shares of a security that trades millions a day goes unnoticed; selling 5,000 shares of a security that trades 8,000 a day means becoming the day's event yourself.
Why selling fast sometimes costs
Liquidity has an unpleasant property: it varies with circumstances, and as a general rule it thins out at the moment when the most people want to sell. A hurried market order, in a thin book, walks down the list of buyers: the first shares go at the best price, the following ones at lower and lower prices. The cost is not a fee — it is the price of demanding immediacy from a market that has no immediate counterparty.
A neutral worked example
A fictional security quotes "$10.00" (last trade). The buyers' book: 300 shares at $9.90, then 500 at $9.60, then 700 at $9.20.
- A RUSHED sale of 1,000 shares, at market: 300 go at $9.90, 500 at $9.60, 200 at $9.20 — total proceeds $9,610, an average price of $9.61: 3.9% below the quote shown, with no bad news at all.
- The same quantity, sold WITHOUT urgency through limit orders over several days, could have come closer to the quote — at the cost of a delay and with no guarantee of execution (that is the trade-off set out in the article on orders).
The quote shown was good for 300 shares; the rest of the order paid to learn the real depth of the book.
What this changes for your tracking
Prices are not yet shown in the app; they will be at launch.
The market value Everyfolio shows — quantity × last quote — is an estimate at the last traded price, not a promise of sale proceeds: it implicitly assumes the whole position could sell at that price, which depends on the depth of the book at the time. Two positions with the same displayed value can therefore represent different exit realities — that is a property of the market, visible on the broker's statement (spread and volume), not in a portfolio tracker.
Informative, general content — not personalized advice. For your situation: your institution or an advisor.