Archive · 17 Jun 2025
Trader Warns of Liquidity Risks in Investment Portfolios
Imagine you have investments, like stocks or crypto.
They seem valuable on paper, but can you quickly get cash from them?
That's liquidity.
Some investments, like popular stocks, are easy to sell fast.
Others, like some crypto or startup shares, are hard to sell, and you might lose money if you need cash quickly.
This trader says it’s important to think if you can sell your investments for cash within a week.
If you can't, that investment might cause you problems if you need cash fast.
Shivam Gupta, Head of Trading at LCX, warns about the hidden liquidity risks in investment portfolios.
Liquidity refers to how easily an investment can be converted to cash without affecting its price.
Highly liquid assets like Apple stock and Bitcoin can be sold quickly due to high trading volumes.
Assets like startup equity and niche crypto tokens may take weeks or months to sell, potentially at losses.
Gupta's advice: assess the ability to sell an investment for cash within a week before investing.
- Who
- Shivam Gupta, Head of Trading at LCX.
- What
- A warning about the risks of illiquid assets in investment portfolios.
- When
- The warning was given recently by Shivam Gupta.
- Where
- N/A
- Why
- To make investors aware of the risks associated with illiquid assets and emphasize the importance of portfolio liquidity.
- Expert
- Shivam Gupta, Head of Trading at LCX
- Liquidity Definition
- How quickly and easily an investment can be converted into cash without affecting its price.
- Highly Liquid Assets
- Apple stock, Bitcoin
- Less Liquid Assets
- Startup equity, niche crypto tokens, real estate
- Gupta's Rule
- Can I sell this for cash within a week?