Imagine moving house, and the movers tell you they have two options.
Option one, they carry your furniture to the new place. Option two, they sell everything at the curb, hand you cash, and you buy replacement furniture when you arrive.
Obviously you pick option one. Nobody picks option two.
And yet when people move an IRA from one brokerage to another, a startling number of them accept option two without realizing there was a choice. Their investments get sold, the cash sits somewhere for a week or two, and it gets reinvested at whatever prices exist on the far side.
That is a liquidated transfer. The alternative, where your actual holdings move over intact, is an in-kind transfer.
The difference is usually small. Occasionally it is enormous. And since choosing correctly costs nothing, it is worth ten minutes of understanding.