Understanding Liquidity in Equity Markets

In modern equity markets, various structures facilitate the trading of securities. Understanding market microstructure is essential for market participants as it helps them navigate these environments.

Market microstructure examines the processes and systems that facilitate the exchange of securities, including aspects like order types, quoting mechanisms, and the role of market makers. Given this context, consider the following question:

What does the term 'liquidity' refer to in the context of equity markets?