There is an apparent contradiction in the advantages of futures/forwards and liquidity.
In the derivatives section, futures and forwards offer greater liquidity than trading in the underlying directly. On the other hand, I recall reading several times that derivatives don’t have more liquidity than the underlying spot market.
Can some of you wise CFA candidates shed some light on my lack of understanding?
I may try to answer on this one 
You are partially right. We can distinguish 2 kinds of derivatives in terms of liquidity:
Those that have no underlying asset - gold, energy, oli. Rarely people buy oli or gold and store it in the garage, so they exist mostly as derivatve contracts. And they have high liquidty (both spot and future delivery).
Those that have an underlying asset - eg. options on bonds, stocks. And in this case when a particulat bond or a stock is itself thinly traded, the derivative is not likely to be more traded as well. Thus such derivatives have low liquidty.
Hope it helps.
Like anything liquidity depends on what you’re trading. Some derivatives, especially those commonly traded on exchanges are super liquid, like S&P minis, treasury bond futures etc. and that is why they are used to modify portfolio betas or durations. They are easier to trade a large position on relative to a portfolio of different off the run bonds or a diversified portfolio of stocks.
Other derivatives, like synthetic CDS on investment grade bonds can be relatively illiquid (ask the london whale). If it’s not an OTC derivative it should be even less liquid. And like kobi said above, options on certain thinly traded stocks or options that are well out of the money or well into the future can also have limited liquidity.
I don’t remember if it was taught in the curriculum, but like anything traded publically, you can look at spreads, volume etc. to determine liquidity.
Thank you!