Trading Volume
The total number of shares or contracts traded for a security during a given period, typically one trading day.
What is Trading Volume?
Trading volume is the total number of shares, bonds, or contracts exchanged between buyers and sellers during a specified time period. It is one of the most widely tracked market data points and serves as a proxy for market activity and investor interest. High volume often accompanies major price moves, confirming that a trend has broad participation. Low volume during a price move suggests weakness and potential for reversal. Technical analysts use volume alongside price charts to validate breakouts, assess momentum, and identify distribution or accumulation patterns. Average daily trading volume (ADTV) is used to measure a stock's typical liquidity and is important when sizing large institutional positions.
Example
On the day Apple reported FY2024 earnings, over 150 million shares changed hands — more than three times its average daily volume of about 50 million. The elevated volume confirmed the significance of the earnings move and signaled strong institutional participation in reassessing the stock's valuation.
Source: Investopedia — Volume