Liquidity
More liquidity means tighter spreads, easier entry and exit, and more reliable prices.
Prediction Markets 101 editorial team Updated April 16, 2026 1 min read
Definition
Liquidity is the size of orders available to trade without materially moving the price. Deep liquidity = you can trade large without slippage.
Plain-English explanation
A market with $1M of bids and asks within 1¢ of the midpoint is very liquid. A market with only $500 of orders is thin. Trading large sizes in thin markets means eating through the book at worsening prices.
Example
On a deep market, buying $10,000 of YES barely moves the price. On a thin market, the same order could move the price 10 cents or more.