Sorry, our subscription options are not loading right now Please try again later. View our subscription options If you already have an account, please sign in here. Bitcoin futures volumes wake to new dawn on CME and other exchanges 24 May Offshore renminbi futures set new record at SGX 10 May Open interest in FX futures grows in Singapore 12 Apr Singapore Exchange enlists its first Middle Eastern trading member 05 Apr FX Link pulls futures-shy banks into the fray, says CME 29 Mar Seed CX adds new crypto pairs, lands ally in Asia 25 Mar CBOE pulls plug on bitcoin futures trading 15 Mar Receive the content you need straight to your inbox Choose to follow a range of topics and receive a regular roundup of the latest coverage.

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CME Group sees record FX Link daily volume with 82, contracts. The FX Link average daily volume ADV tripled in June , registering 43, contracts being traded every day, com It is important to note that cash is not uniformly liquid for several reasons. The below examples encompass all types of assets and their corresponding level of liquidity. Other major forms of cash include Euros, or major currencies. This differs notably from the legal tender in many emerging countries or others for political or economic reasons.

These are generally assumed to be quick assets. As such, these assets are liquid. Common examples of this include land or real estate, intellectual property, or other forms of capital such as equipment or machinery.

Illiquid assets on the other hand often suffer from fees or additional conversion costs, processing times, ultimately creating a price disparity. For many individuals this is the most valuable asset they will own in their entire lives. However, selling a house typically requires taxes, realtor fees, and other costs, in addition to time.

Real estate or land also takes much longer to exchange into cash, relative to other assets. Both measures deal with different constructs or entities entirely, though are useful metrics with regards to individuals or financial markets. This can include among others, a real estate or property market, market for fine arts and collectable, and other goods.

The degree to which stocks from large companies or foreign currencies can be exchanged is much easier than finding a readily available market for antiques, collectables, or other capital, regardless of utility. This is because the difference between both the bid and ask prices between parties is very low. The lower the spread between these two prices, the more liquid a given market is. Additionally, low liquidity refers to a higher spread between two prices.

One can define liquidity in stocks or stock markets in the same way as in foreign exchange markets, brokers, commodities exchanges, and crypto exchanges. The foreign exchange market for example is currently the largest by trading volume with high liquidity due to cash flows. This is hardly surprising given that forms of cash or currencies are being exchanged. By definition, liquidity in stocks varies for a number of reasons. Stocks with low liquidity may be difficult to sell and may cause you to take a bigger loss if you cannot sell the shares when you want to.

In finance, the most liquid assets are always the most popular. A good example of this is the real estate or property market. While highly valuable, there are large disparities between the purchase price and selling price of property, as well as the time associated in making these transactions, and additional fees incurred by other parties.

Liquidity providers play a key role in this regard. Accounting liquidity is a measure by which either an individual or entity can meet their respective current financial obligations with the current liquid assets available to them.

CME Group announced on Thursday that the FX Link trading volume peaked on June 16 as 82, contracts changed hands, making it a single-day record on the derivatives platform.

The latest record surpassed the previous daily volume peak of 77, contracts that was recorded on March 10, The FX Link average daily volume ADV also tripled in June , with over 43, contracts being traded every day, compared to nearly 15, contracts in the same month last year. They are generally divided into two categories.

This includes contingent claims options and forward claims, where forward contracts, swaps, and exchange-traded funds ETFs are exchanged.

Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of SwapsCommon types of swaps include interest rate swaps, commodity swaps, currency swaps, and debt-equity swaps. Interest rate swaps are used to hedge against interest rate risk and involve cash flows exchanged between two parties that are comprised of a notional principal amount.

Commodity swaps use the exchange of a floating commodity price, with a predetermined set price for a specific period while crude oil is the most heavily swapped commodity.

Meanwhile, currency swaps involve the exchange of principal payments of debt and interest that are denominated in different currencies.

An example of a currency swap would be when the U. Federal Reserve conducted a swap with central banks of Europe during the European financial crisis. Used as a way to reallocate capital structure or refinance debt, a debt-equity swap deals with the exchange of debt for equity. For instance, a public traded company would issue bonds for stocks.

Swaps are not exchange-traded instruments but rather customized contracts traded in an over-the-counter market between parties. Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments. Read this Term liquidity pool, FX Link allows participants to gain access to alternative pricing of swaps relative to OTC, and benefit from the capital efficiencies which come from using FX futures.

As a result of the increased client participation in , top of book spreads have reduced, and we have seen strong growth in order book depth.

CME launched FX Link in It connects the FX futures contract and the OTC FX marketplace, featuring spot FX basis spreads. It aims to offer OTC FX market participants with improved access and utilization of FX futures as part of their overall trading activity. The offering attracted some of the big names in the industry, including Deutsche Bank which is a major liquidity provider in FX Link. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.

This can be differentiated as market liquidity or accounting liquidity. The most common ways to do so include a current ratio, quick ratio, and cash ratio. Its primary function is to ascertain how quickly a given asset can be bought, sold, or exchanged without a disparity in market price. This is due to its widespread acceptance and ease of conversion into other assets, forms of cash, or currencies, etc.

All other liquid assets must be able to be quickly and efficiently converted into cash, i. This includes such things as stocks, commodities, or virtually any other construct that has an associated value. These assets, also known as tangible assets, can include such things as rare art or collectables, real estate, etc. It is important to note that cash is not uniformly liquid for several reasons.

The below examples encompass all types of assets and their corresponding level of liquidity. Other major forms of cash include Euros, or major currencies. This differs notably from the legal tender in many emerging countries or others for political or economic reasons. These are generally assumed to be quick assets.

As such, these assets are liquid. Common examples of this include land or real estate, intellectual property, or other forms of capital such as equipment or machinery.

Illiquid assets on the other hand often suffer from fees or additional conversion costs, processing times, ultimately creating a price disparity. For many individuals this is the most valuable asset they will own in their entire lives.

However, selling a house typically requires taxes, realtor fees, and other costs, in addition to time. Real estate or land also takes much longer to exchange into cash, relative to other assets. Both measures deal with different constructs or entities entirely, though are useful metrics with regards to individuals or financial markets.

This can include among others, a real estate or property market, market for fine arts and collectable, and other goods. The degree to which stocks from large companies or foreign currencies can be exchanged is much easier than finding a readily available market for antiques, collectables, or other capital, regardless of utility.

This is because the difference between both the bid and ask prices between parties is very low. The lower the spread between these two prices, the more liquid a given market is.

Additionally, low liquidity refers to a higher spread between two prices. One can define liquidity in stocks or stock markets in the same way as in foreign exchange markets, brokers, commodities exchanges, and crypto exchanges. The foreign exchange market for example is currently the largest by trading volume with high liquidity due to cash flows. This is hardly surprising given that forms of cash or currencies are being exchanged. By definition, liquidity in stocks varies for a number of reasons.

Stocks with low liquidity may be difficult to sell and may cause you to take a bigger loss if you cannot sell the shares when you want to. In finance, the most liquid assets are always the most popular. A good example of this is the real estate or property market. While highly valuable, there are large disparities between the purchase price and selling price of property, as well as the time associated in making these transactions, and additional fees incurred by other parties.

Liquidity providers play a key role in this regard. Accounting liquidity is a measure by which either an individual or entity can meet their respective current financial obligations with the current liquid assets available to them.

This includes paying off debts, overhead, or any other fixed costs associated with a business. In the United States and other countries, companies and individuals have to reconcile accounting on a yearly basis. Accounting liquidity is an excellent measure that captures financial obligations due in a year. These measures are useful tools for not just the individual or company in focus but for others that are trying to ascertain current financial health.

If there is a large disparity between these figures, or much more assets than obligations, a company can be considered to have a strong depth of liquidity. This can be achieved using a total of four formulas: the current ratio, quick ratio, acid-test variation, and cash ratio. Highly liquid assets will correspond to higher numbers in this regard.

Conversely, any number less than 1 indicates that current liquid assets are not enough to cover short-term obligations. Unlike the current ratio, the quick ratio excludes current assets that are not as liquid as cash, cash equivalents, or other shorter-term investments.

The acid-test ratio seeks to deduct inventory from current assets, serving as a traditionally broader measure that is more forgiving to individuals or entities.

In this sense, the cash ratio is the most precise of the other liquidity ratios, excluding accounts receivable, inventories, or other assets. In the financial services space, even large companies or profitable institutions can find themselves at liquidity risk due to unexpected events beyond their control.

Liquid markets benefit all market participants and make it easier to buy and sell securities, stocks, collectables, etc. Additionally, high liquidity promotes financial health in companies in the same way it does for individuals.

This metric is a commonly used as a measure in the investing, banking, or financial services space. Liquidity determines how quickly a given asset can be bought, sold, or exchanged without a disparity in market price.

Of all assets, cash or money is the most liquid, meaning it is the easiest to utilize. All other liquid assets must be able to be quickly and efficiently converted into cash. However, high liquidity is associated with lower risk, while a liquid stock is more likely to keep its value when being traded. Is a Home a Liquid Asset? Selling any property can incur additional costs and take a long amount of time. Additionally, there is often a price disparity from the time of purchase, meaning a seller may not even get its original market value back at the time of the sale.

Additionally, the company is a popular single-stock CFD offering at many brokerages, with very high volumes. Until you are eligible to withdraw or collect a pension, without early withdrawal penalty, it is not considered a liquid asset. The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. FM Home.

This will create the first ever central limit order book between the over-the-counter OTC spot FX and CME Group FX futures markets. Seed CX adds new crypto pairs, lands ally in Asia 25 Mar In the United States and other countries, companies and individuals have to reconcile accounting on a yearly basis. The foreign exchange market for example is currently the largest by trading volume with high liquidity due to cash flows. This can be achieved using a total of four formulas: the current ratio, quick ratio, acid-test variation, and cash ratio. Highly liquid assets will correspond to higher numbers in this regard. The below examples encompass all types of assets and their corresponding level of liquidity.

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