The ownership structure of a firm in terms of the presence of legal and real stockholders affects the price behavior, liquidity, and firm's volume of stock exchange. Institutional investors including investment firms and other commercial companies greatly affect companies and have access to a great deal of information about their prospects, plans, and even potential contracts due to owning a majority of their stocks. The purpose of this study is to investigate the relationship between the firm's stock returns and presence of stockholders with stock liquidity in 2007-2011. In more detail, this applied-correlational research studies the relationship among managers' ability, firm size, institutional stockholders, and fluctuation in stock returns on the one hand, and stock liquidity on the other. The results manifested that the presence of institutional stockholders and fluctuation in stock returns have a significant relationship with stock liquidity of firms listed on the Tehran Stock Exchange.
