There are basically two types of liquidity risk. The first is cash flow risk in which a corporation is concerned with whether or not it can fund its liabilities. The easy way to avoid cash flow risk is through a line of credit or similar funding method. The second is market liquidity risk. This is the type of liquidity risk that a trader is concerned with since it is the inability to easily exit a position. One of the markets where this type of risk is most easily seen is in the real estate market. When bad real estate market conditions prevail, it may be impossible to sell a property at anywhere near a fair market price. Even though the property may have obvious value it can be impossible to extract that value in the absence of buyers.