Average Volume

RECENT NEWS
Forbes  Jan 29  Comment 
The PowerShares Dynamic Semiconductors Portfolio ETF (PSI) is seeing unusually high volume in afternoon trading Thursday, with over 197,000 shares traded versus three month average volume of about 31,000.  Shares of PSI were off about 1% on the day.
Forbes  Jan 22  Comment 
The iShares MSCI USA Momentum Factor ETF (MTUM) is seeing unusually high volume in afternoon trading Thursday, with over 199,000 shares traded versus three month average volume of about 42,000.  Shares of MTUM were up about 0.9% on the day.
Forbes  Jan 21  Comment 
The PowerShares Dividend Achievers Portfolio ETF (PFM) is seeing unusually high volume in afternoon trading Wednesday, with over 135,000 shares traded versus three month average volume of about 42,000.  Shares of PFM were up about 0.5% on the day.
Forbes  Jan 13  Comment 
The iShares MSCI USA Value Factor ETF (VLUE) is seeing unusually high volume in afternoon trading Tuesday, with over 1.1 million shares traded versus three month average volume of about 32,000.  Shares of VLUE were up about 0.9% on the day.
Forbes  Jan 9  Comment 
The iShares U.S. Medical Devices ETF (IHI) is seeing unusually high volume in afternoon trading Friday, with over 289,000 shares traded versus three month average volume of about 91,000.  Shares of IHI were off about 0.7% on the day.
Forbes  Jan 8  Comment 
The iShares MSCI USA Value Factor ETF (VLUE) is seeing unusually high volume in afternoon trading Thursday, with over 1.1 million shares traded versus three month average volume of about 42,000.  Shares of VLUE were up about 1.7% on the day.
Forbes  Jan 5  Comment 
The iShares Core MSCI Total International Stock ETF (IXUS) is seeing unusually high volume in afternoon trading Monday, with over 7.1 million shares traded versus three month average volume of about 110,000.  Shares of IXUS were down about 2% on...
Forbes  Dec 31  Comment 
The MLP and Energy Infrastructure ETF (MLPX) is seeing unusually high volume in afternoon trading Wednesday, with over 502,000 shares traded versus three month average volume of about 81,000.  Shares of MLPX were up about 0.3% on the day.
Forbes  Dec 29  Comment 
The most recent short interest data was recently released by the NASDAQ for the 12/15/2014 settlement date, and Boyd Gaming Corp. (NYSE: BYD) is one of the most shorted stocks of the Russell 3000, based on 6.05 "days to cover" versus the median...
Forbes  Dec 23  Comment 
The SPDR S&P Global Natural Resources ETF (GNR) is seeing unusually high volume in afternoon trading Tuesday, with over 790,000 shares traded versus three month average volume of about 138,000.  Shares of GNR were up about 0.2% on the day.




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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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