A liquid market refers to a financial market where there are many buyers and sellers, and transactions can be executed quickly and at low cost. This type of market has high trading volume, which means there is a large number of shares or other assets being bought and sold on a regular basis.

Investors prefer liquid markets because they offer greater flexibility, allowing them to easily buy and sell assets without experiencing significant price fluctuations. In a liquid market, there is typically a narrow bid-ask spread, which means the difference between the price at which buyers are willing to buy and the price at which sellers are willing to sell is relatively small.

Examples of liquid markets include major stock exchanges like the New York Stock Exchange (NYSE) and NASDAQ, as well as currency markets like the foreign exchange (Forex) market. Overall, a liquid market is considered to be an indicator of a healthy and active financial system.