Average Volume

RECENT NEWS
Forbes  Apr 10  Comment 
The most recent short interest data has just been released by the NASDAQ for the 03/31/2014 settlement date, and we here at Dividend Channel have sifted through this fresh data and screened out these five Dow Jones Industrial Average components. A...
Forbes  Apr 10  Comment 
Looking through the closing trading data for the Russell 1000 components, there are some abnormal volume stand-outs that traders will be interested to watch during Thursday's upcoming session. To compile this list, we calculated the three month...
Mondo Visione  Apr 9  Comment 
Q1 avg trading volume keeps at 56,000 contracts despite uncertainties To raise trading margins ahead of Thai new year holidays To launch mini SET50 futures on May 6 Thailand Futures Exchange PCL (TFEX), under The Stock Exchange of...
Forbes  Apr 4  Comment 
The PowerShares S&P 500 High Dividend Portfolio ETF (SPHD) is seeing unusually high volume in afternoon trading Friday, with over 344,000 shares traded versus three month average volume of about 25,000.  Shares of SPHD were up about 0.4% on the day.
newratings.com  Apr 3  Comment 
WASHINGTON (dpa-AFX) - IntercontinentalExchange Group (ICE), a global network of exchanges and clearing houses, Thursday said its average daily volume or ADV decreased 16 percent for March and 13 percent for the first quarter, compared to the...
Mondo Visione  Apr 1  Comment 
The Options Industry Council (OIC) announced today that 355,570,399 total options contracts were traded in March, 14.12 percent more than March of last year when 311,565,300 contracts were exchanged. Average daily volume was 16,931,924...
Forbes  Mar 31  Comment 
The SPDR S&P Global Natural Resources ETF (GNR) is seeing unusually high volume in afternoon trading Monday, with over 339,000 shares traded versus three month average volume of about 92,000.  Shares of GNR were up about 0.7% on the day.
Forbes  Mar 26  Comment 
The most recent short interest data has just been released by the NASDAQ for the 03/14/2014 settlement date, and we here at Dividend Channel have sifted through this fresh data and screened out these five Dow Jones Industrial Average components. A...
Forbes  Mar 25  Comment 
The Mortgage REIT Income ETF (MORT) is seeing unusually high volume in afternoon trading Tuesday, with over 139,000 shares traded versus three month average volume of about 39,000.  Shares of MORT were down about 0.3% on the day.
SeekingAlpha  Mar 21  Comment 
ByRupert Hargreaves: Summary Within this article I am going to lay out the investment case for precious metals miner Mandalay Resources Corp (OTC:MNDJF) (TSE:MND). This article lays out Mandalay's strategy for growth over the long-term as...




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The average volume is the average number of shares traded daily for a particular security

Also known as average daily volume or average daily trading volume, the average daily volume is a measure of the liquidity of a stock based on the number of shares that trade hands from sellers to buyers each day. If a buyer purchases 100 shares, then the volume for that period increases by 100 shares from that transaction.

Unusually high volume in comparison to the average daily volume can indicate big news about a company - if something has changed investors' perception of a company's value, the trading that results (either buying or selling) pushes up volume for that day - for example, if a company submitted earnings or guidance that was unexpectedly high or low.

Securities with high average daily volume can be easily traded and are very liquid. Companies with low average daily volume are less liquid and harder to trade because there are fewer buyers and sellers for the stock. Securities with low average daily volumes (for example, fewer than 50,000 trades a day) are susceptible to higher volatility because sellers have more control over the price of the security. Securities with higher average daily volumes are more competitive and therefore less volatile.

Examples

Consider an extreme case of low average daily volume where there is only one seller of a security. If you want to buy that security from the seller, you have to accept their price because there is no one else competing for the sale. Later, as an owner of this low average daily volume security, the company releases horrible earnings news. Now, wou want to sell the security, however, because there are very few buyers for security, you are stuck with it.

In another case, you have two securities you're considering purchasing. Everything about the two companies is equivalent -- share price, earnings, demographics, etc. -- except, one of the securities has a higher trading volume than the other. In this case, purchase the company shares with the higher trading volume. This will ensure you purchase the shares at a competitive price and will have a better chance of selling the shares in the future.

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