Average volume

Mondo Visione  Jul 28  Comment 
Today Euronext announced its results for the second quarter of 2017. Strong quarter, with improved cash and derivatives volumes: Revenues up +3.8% compared to Q2 2016, to €137.3 million (Q2 2016: €132.3 million) Cash average...
Benzinga  Jul 24  Comment 
Petmed Express Inc (NASDAQ: PETS) shares are trading higher by $6.16, 15 percent, at $46.70 in Monday's session. The catalyst for the rally far beyond its former all-time high was a Q1 beat of 7 cents along with a sales beat of $2.32...
Motley Fool  Jun 19  Comment 
An emerging competitive threat caused Tesaro's stock to briefly dip today.
The Economic Times  Jun 5  Comment 
On BSE, 90,000 shares have been traded on the counter so far, compared with the average daily volume of 9,064.
Benzinga  May 2  Comment 
Coach Inc (NYSE: COH) shares are trading higher by $3.76 (10 percent) at $42.50 in Tuesday's session. Before the open, the company reported a mixed Q3 report: EPS beat of $0.02 with a $52 million sales miss. The company maintained FY 2017 sales...
The Economic Times  Apr 13  Comment 
On BSE, 1.59 lakh shares exchanged hands in the counter, compared with an average volume of 2.27 lakh shares in the past two week.
The Economic Times  Apr 6  Comment 
On the volume front, over 3.83 lakh shares of the firm exchanged hands on BSE against average daily volume 7.53 lakh shares in the last two weeks.
The Economic Times  Mar 29  Comment 
On the BSE, 2.56 crore shares were traded in the counter so far, compared with average daily volume of 28,000 shares in the past two weeks.
The Economic Times  Mar 8  Comment 
On the BSE, 277 lakh shares were traded in the counter so far as against average daily volume of 1.41 lakh shares in the past two weeks.
The Economic Times  Feb 10  Comment 
On BSE, so far 56,000 shares were traded in the counter as against average daily volume of 75000 shares in the past two weeks.


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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.


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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