Liquidity in a securities market
means how easy it is to do a trade there. A market is said to liquid
if it is possible to sell a large amount of securities quickly without affecting the price much, and illiquid
if selling large amounts is hard (takes a lot of time or change the price a lot).
A market participant is said to add liquidity to the market when posting a new limit order that is not filled immediately, and is said remove liquidity when taking a previous limit order.
Market participants that add liquidity on both sides of the market (posting buy and sell limit orders at the same time) are called market makers.