Average Daily Trading Volume - ADTV

AAA

DEFINITION of 'Average Daily Trading Volume - ADTV'

The average amount of individual securities traded in a day or over a specified amount of time. Trading activity relates to the liquidity of a security; therefore, when average daily trading volume is high, the stock can be easily traded and has high liquidity. As a result, average daily trading volume can have an effect on the price of the security. If trading volume isn't very high, the security will tend to be less expensive because people are not as willing to buy it.

INVESTOPEDIA EXPLAINS 'Average Daily Trading Volume - ADTV'

When average daily trading volume increases or decreases dramatically, this is a signal that there has been some news released that has affected people's views on the security. Usually, higher average daily trading volumes mean that the security is more competitive, has narrower spreads and is typically less volatile. Stocks are less volatile when they have higher average daily trading volumes because much larger trades would have to be made to have an effect on the price.

RELATED TERMS
  1. Spread

    1. The difference between the bid and the ask price of a security ...
  2. Contract Size

    The deliverable quantity of commodities or financial instruments ...
  3. Liquidity

    1. The degree to which an asset or security can be bought or ...
  4. Volatility

    1. A statistical measure of the dispersion of returns for a given ...
  5. Volume

    The number of shares or contracts traded in a security or an ...
  6. Most Active

    The stocks on an exchange that had the highest volume over a ...
Related Articles
  1. Options & Futures

    Volatility - The Birth Of A New Asset ...

  2. Options & Futures

    How To Read The Market's Psychological ...

  3. Options & Futures

    Options Trading Volume And Open Interest

  4. Brokers

    Who was the first person charged by ...

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center