Dollar Volume Liquidity

Liquidity in shares of companies traded takes on a few faces. And note that "liquidity" in this sense refers to how easy/difficult it remains for traders/investors to buy and sell a given stock. That is, if a company has 100 million shares outstanding that trade for, say, $20 a share today, and the investor wants to buy 5 million shares, then how many days' trading will that take?

Well, if the stock is liquid and trades 10 million shares a day, it's a pretty easy in and out. (Giggity.) If the stock is illiquid, trading only a million shares a day, getting in and getting out will be a slog. Share Volume Liquidity can be counted as the number of shares traded in a given day, but the share count that measures liquidity is often misleading.

Like...let's say a given investor wants to put $80 million into a given company. If that company has big volume, but in shares that are traded at $5 a share, it's a vastly different share count on that dollar volume (16 million shares) to get that money invested...versus buying shares of, say, Amazon trading for two grand a pop. That is, to invest $80 million into AMZN at $2k a share, the buyer need only buy 400,000 shares. The dollar volume here just looks at the cashola being invested rather than the share count or shares traded, as dollar volumes are a better window on simply a share count, especially when prices are trading all over the place like its Black Friday and you're Prime.