DOLLAR VOLUME LIQUIDITY

Price of a stock or exchange-traded fund multiplied by its average volume. This is significant for institutional investors since they make huge trades. When a stock is highly illiquid, they find it easy to enter and exit positions, and also to purchase and sell without affecting its price. There is a very small bid-ask spread. It is also important for small cap investors since small company stocks do not have the same liquidity investors can take for granted with a large cap stock.