Average volume

RECENT NEWS
Forbes  Jun 28  Comment 
The most recent short interest data has been released for the 06/15/2016 settlement date, which shows a 779,756 share increase in total short interest for Cincinnati Financial Corp. (NASD: CINF), to 3,825,559, an increase of 25.60% since...
Forbes  Jun 28  Comment 
The most recent short interest data has been released for the 06/15/2016 settlement date, which shows a 1,069,383 share increase in total short interest for LKQ Corp (NASD: LKQ), to 7,519,196, an increase of 16.58% since 05/31/2016. Total short...
Forbes  Jun 28  Comment 
The most recent short interest data has been released for the 06/15/2016 settlement date, which shows a 2,550,262 share decrease in total short interest for PulteGroup Inc (NYSE: PHM), to 19,114,631, a decrease of 11.77% since 05/31/2016. Total...
Forbes  Jun 28  Comment 
The most recent short interest data has been released for the 06/15/2016 settlement date, which shows a 1,228,628 share decrease in total short interest for Pentair PLC (NYSE: PNR), to 8,884,271, a decrease of 12.15% since 05/31/2016. Total short...
Forbes  Jun 28  Comment 
The most recent short interest data has been released for the 06/15/2016 settlement date, which shows a 462,425 share decrease in total short interest for Affiliated Managers Group Inc. (NYSE: AMG), to 774,041, a decrease of 37.40% since...
Forbes  Jun 27  Comment 
The most recent short interest data has been released for the 06/15/2016 settlement date, which shows a 3,890,951 share increase in total short interest for Allstate Corp. (NYSE: ALL), to 7,433,721, an increase of 109.83% since 05/31/2016. Total...
Forbes  Jun 27  Comment 
The most recent short interest data has been released for the 06/15/2016 settlement date, which shows a 51,685,717 share increase in total short interest for AbbVie Inc. (NYSE: ABBV), to 78,214,101, an increase of 194.83% since 05/31/2016. Total...
Mondo Visione  Jun 23  Comment 
Total trading volume on SEFs averaged $457.3 billion per day during the month of May, which was approximately the same from the previous month but up by 18.1% from May 2015. In contrast to the overall uptrend, average daily volume in ...
Mondo Visione  Jun 3  Comment 
Euronext, the leading exchange in the Eurozone, today announced trading volumes for May 2016. The May 2016 average daily transaction value on the Euronext cash order book stood at €5,932 million (-26.0% compared with May 2015). The activity...
Mondo Visione  Jun 2  Comment 
CME Group, the world's leading and most diverse derivatives marketplace, today announced that May 2016 volume averaged 14.9 million contracts per day, up 6 percent fromMay 2015.  CME Group May 2016 options volume averaged 2.8 million...




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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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