Average volume

RECENT NEWS
Forbes  Nov 13  Comment 
The PowerShares Aerospace & Defense Portfolio ETF (PPA) is seeing unusually high volume in afternoon trading Thursday, with over 694,000 shares traded versus three month average volume of about 42,000.  Shares of PPA were up about 0.5% on the day.
Forbes  Nov 12  Comment 
The most recent short interest data has been released by the NASDAQ for the 10/31/2014 settlement date, and we here at Dividend Channel like to sift through this fresh data and order the underlying components of the Dow Jones Industrial Average by...
Forbes  Nov 11  Comment 
The Africa Index ETF (AFK) is seeing unusually high volume in afternoon trading Tuesday, with over 116,000 shares traded versus three month average volume of about 32,000.  Shares of AFK were up about 1.1% on the day.
Forbes  Nov 6  Comment 
The iShares U.S. Regional Banks ETF (IAT) is seeing unusually high volume in afternoon trading Thursday, with over 1.2 million shares traded versus three month average volume of about 174,000.  Shares of IAT were up about 0.5% on the day.
Forbes  Nov 5  Comment 
The First Trust North American Energy Infrastructure Fund ETF (EMLP) is seeing unusually high volume in afternoon trading Wednesday, with over 1.8 million shares traded versus three month average volume of about 247,000.  Shares of EMLP were up...
Forbes  Nov 4  Comment 
The SPDR S&P Global Natural Resources ETF (GNR) is seeing unusually high volume in afternoon trading Tuesday, with over 708,000 shares traded versus three month average volume of about 75,000.  Shares of GNR were down about 0.7% on the day.
Forbes  Nov 3  Comment 
The First Trust Emerging Markets AlphaDEX Fund ETF (FEM) is seeing unusually high volume in afternoon trading Monday, with over 7.2 million shares traded versus three month average volume of about 297,000.  Shares of FEM were off about 0.2% on...
Forbes  Oct 30  Comment 
The Guru Index ETF (GURU) is seeing unusually high volume in afternoon trading Thursday, with over 265,000 shares traded versus three month average volume of about 136,000.  Shares of GURU were off about 0.1% on the day.
Forbes  Oct 24  Comment 
The Biotech ETF (BBH) is seeing unusually high volume in afternoon trading Friday, with over 119,000 shares traded versus three month average volume of about 94,000.  Shares of BBH were up about 1.5% on the day.
Forbes  Oct 21  Comment 
The First Trust Large Cap Value AlphaDEX Fund ETF (FTA) is seeing unusually high volume in afternoon trading Tuesday, with over 585,000 shares traded versus three month average volume of about 188,000.  Shares of FTA were up about 1.4% on the day.




RELATED WIKI ARTICLES

Related Articles

 
TOP CONTRIBUTORS

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.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki