Average volume

The Economic Times  Nov 25  Comment 
On BSE, 12.28 lakh shares changed hand on the counter on Friday against an average daily volume of 4.56 lakh shares in the past two weeks.
Forbes  Nov 18  Comment 
The First Trust Mid Cap Growth AlphaDEX Fund ETF (FNY) is seeing unusually high volume in afternoon trading Friday, with over 159,000 shares traded versus three month average volume of about 26,000. Shares of FNY were down about 0.1% on the day....
Forbes  Nov 16  Comment 
  The First Trust Large Cap Value AlphaDEX Fund ETF (FTA) is seeing unusually high volume in afternoon trading Wednesday, with over 271,000 shares traded versus three month average volume of about 72,000. Shares of FTA were down about 1% on the...
The Economic Times  Nov 11  Comment 
On BSE, 35.38 lakh shares were traded in the counter so far against an average daily volume of 15.85 lakh shares in the past two weeks.
Mondo Visione  Nov 4  Comment 
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for October 2016. The average daily transaction value on the Euronext cash order book for October 2016 stood at €6,328 million, down -18.2%...
Forbes  Oct 27  Comment 
Marijuana stocks are getting lit ahead of the election. With 9 states voting to legalize marijuana in some form, many investors are betting these cannabis companies will benefit. The Marijuana Index has more than doubled in the last month and half...
Benzinga  Oct 25  Comment 
Shares of ContraVir Pharmaceuticals Inc (NASDAQ: CTRV) spiked to a high of $2.34 in early trading Tuesday. Although nearly twice the average daily volume of shares have been exchanged today, no one seems to know what's driving all the market...
Benzinga  Oct 25  Comment 
Windtree Therapeutics Inc (NASDAQ: WINT) shares are down more than 24 percent Tuesday. About 350,000 shares have traded hands, more than three times its average daily volume. Good News Windtree in a press release said that data...
Forbes  Oct 14  Comment 
The most recent short interest data has been released for the 09/30/2016 settlement date, which shows a 2,157,700 share decrease in total short interest for Navient Corp (NASD: NAVI), to 15,636,222, a decrease of 12.13% since 09/15/2016. Total...
Forbes  Oct 14  Comment 
The most recent short interest data has been released for the 09/30/2016 settlement date, which shows a 767,597 share increase in total short interest for Sun Communities, Inc. (NYSE: SUI), to 1,758,243, an increase of 77.48% since 09/15/2016....


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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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