Trading Volume
Trading volume is a measure of the amount of a security that is traded over a given period of time. It is typically measured in units of shares, but can also be measured in terms of contracts or in total dollar value. Trading volume is an important indicator of the liquidity of a security, as well as its popularity. Higher trading volume indicates that more people are trading the security, which can lead to higher liquidity and more efficient pricing. Lower trading volume can indicate that the security is less popular or less liquid.
History of Trading Volume
Trading volume has been used as a measure of market activity since the early days of stock exchanges. It was first used to measure the activity of the London Stock Exchange in the late 18th century. Since then, trading volume has become an important metric for investors and traders to gauge the level of activity in the markets. It is also used to measure the performance of individual stocks, as well as the overall market.
Comparison of Trading Volume
Security | Trading Volume (Shares) |
---|---|
Apple Inc. | 50 million |
Microsoft Corporation | 30 million |
Amazon.com Inc. | 20 million |
Summary
Trading volume is an important measure of market activity and liquidity. It is typically measured in units of shares, but can also be measured in terms of contracts or in total dollar value. Higher trading volume indicates that more people are trading the security, which can lead to higher liquidity and more efficient pricing. For more information on trading volume, investors and traders can visit websites such as Investopedia, Yahoo Finance, and Bloomberg.
See Also
- Liquidity
- Market Activity
- Price Efficiency
- Volume Weighted Average Price (VWAP)
- Average True Range (ATR)
- Relative Strength Index (RSI)
- Moving Average Convergence Divergence (MACD)
- Bollinger Bands
- On Balance Volume (OBV)
- Accumulation/Distribution Line (ADL)