Liquidity means the degree of ease to which an asset or security can be bought or sold in a market without affecting the price in the market or in other words, how easily it can be converted into cash. For day traders, liquidity is a very important factor in formulating a trading strategy as well as in executing a stop-loss order. A trader can quickly analyze liquidity by looking at bid-ask spread or by checking its daily traded volume that is the number of shares being traded each day. The float also affects the liquidity of a stock as it refers to how many shares are available for the public to trade.