What do you mean by Liquidity?

In the financial world, liquidity is a market’s feature whereby an individual or firm can quickly purchase or sell an asset or a security without causing a drastic change in the asset’s price.  It is the ability to buy and sell and the availability of shares in the stock market. Liquidity can be measured either based on trade volume relative to shares outstanding or based on the bid-ask spread or transactions costs of trading.

There is greater liquidity in the more developed stock exchanges like NSE, NASDAQ and DOW as compared to other smaller stock exchanges.