Before revision:  In this article  , we develop a liquidation model in which the trader is constrained to liquidate a portfolio at constant participation rate  . Considering the functional forms usually used by practitioners  , we obtain a closed-form expression for the optimal participation rate and for the liquidity premium a trader should quote to buy a large block of shares.
After revision:  In this article , we develop a liquidation model in which the trader is constrained to liquidate a portfolio at constant participation rate . Considering the functional forms usually used by practitioners , we obtain a closed-form expression for the optimal participation rate . Also, we develop a microfounded risk-liquidity premium that permits to better assess the costs and risks of execution processes and to give a price to a trader should quote to buy a large block of shares.