Average Volume

RECENT NEWS
Forbes  Aug 22  Comment 
The Global X MLP ETF (MLPA) is seeing unusually high volume in afternoon trading Monday, with over 365,000 shares traded versus three month average volume of about 133,000.  Shares of MLPA were down about 0.4% on the day.
Forbes  Aug 10  Comment 
The most recent short interest data has been released for the 07/29/2016 settlement date, which shows a 4,311,139 share increase in total short interest for Herbalife Ltd. (NYSE: HLF), to 26,578,840, an increase of 19.36% since 07/15/2016. Total...
Forbes  Aug 10  Comment 
The most recent short interest data has been released for the 07/29/2016 settlement date, which shows a 1,652,631 share decrease in total short interest for Mallinckrodt plc (NYSE: MNK), to 8,962,127, a decrease of 15.57% since 07/15/2016. Total...
Forbes  Aug 10  Comment 
The most recent short interest data has been released for the 07/29/2016 settlement date, which shows a 5,697,617 share decrease in total short interest for Hilton Worldwide Holdings Inc (NYSE: HLT), to 27,530,184, a decrease of 17.15% since...
Forbes  Aug 10  Comment 
The most recent short interest data has been released for the 07/29/2016 settlement date, which shows a 6,096,080 share increase in total short interest for Lockheed Martin Corp. (NYSE: LMT), to 13,593,595, an increase of 81.31% since 07/15/2016....
Reuters  Aug 10  Comment 
* July foreign exchange (hotspot) total volume traded of $551.0 billion
MarketWatch  Aug 3  Comment 
Shares of Twitter Inc. were climbing 5% Wednesday morning. There were about 8.2 million shares trading, compared to the 30-day average volume of 23.6 million shares. Shares have gained 3% week-to-date even after Twitter missed second-quarter...
Mondo Visione  Aug 3  Comment 
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for July 2016. Please note that the lower number of trading days in July 2016 – 21 this year versus 23 in July 2015 – contributed to the -9.5% drop in...
Forbes  Jul 27  Comment 
The most recent short interest data has just been released for the 07/15/2016 settlement date, and we here at BDC Investor have sifted through this fresh data and screened out these five BDCs. A metric we find particularly useful when comparing...
Forbes  Jul 27  Comment 
The most recent short interest data has been released for the 07/15/2016 settlement date, which shows a 2,010,391 share increase in total short interest for Cerner Corp. (NASD: CERN), to 19,305,495, an increase of 11.62% since 06/30/2016. Total...




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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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