In finance, illiquid refers to an asset or security that cannot be easily sold or exchanged for cash without a significant loss of value. This can happen for a variety of reasons, such as a lack of buyers, market disruptions, or regulatory restrictions.
Illiquid assets are typically less desirable to investors because they are more difficult to sell or trade, and may be subject to wider bid-ask spreads or require a longer holding period to find a buyer. Examples of illiquid assets include real estate, private equity, and some types of bonds or derivatives with limited market demand.