What is the volume of trading?
The volume of trading, sometimes simply referred to as volume, concerns the number of shares or secure contracts traded over a defined period of time. Most often, trading volume is measured daily, but depending on the security that is traded, the volume can be measured in longer time -levels such as a week or month. For example, if an investor Bob bought 5,000 shares from XYZ Corporation, XYZ increased the volume by 5,000 per day. If investor Bob sold 5,000 shares of XYZ Corporation, it would also increase its volume by 5,000 per day. If the volume of trading in a given year increases significantly four times, it usually indicates when quarterly revenues were published for the company. Significant losses and earnings will generally lead to movement in the business volume for this event. When announced earnings announced, trading tips usually indicate warm and unclear feelings about the safety of investors and loss usually send to investors to their brokers to release their badSecurity before realizing any considerable loss.
In addition to earnings reports, significant volumes may indicate that some important news is taking place. For example, predictions of increased maize crops, followed by record spring rains and floods, reduced the normal supply of corn, which increases demand and then increases the price. As a result of floods, speculators and investors raced to their commodity brokers to buy futures corn at a higher price, causing a significant increase in the business volume of corn futures.
Institutional investors from large brokerage companies buy and sell securities in large blocks in investing for their clients. Wslepice analysis of the volume of trading, you can see an increase in volume that is not explained by earnings or news cycles. These tips are most likely the cause of large shops to createdressed in institutions.
Although volume is very simple measurement, an average person or newcomer may not understand how useful this information can be. The volume of trading is a powerful market tool that is used for technical analysis. Movements in volume can indicate investors' sentiment, important events on the market, or institutional security trading.