Average Daily Trading Volume - ADTV


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.

BREAKING DOWN '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.

  1. Liquidity

    The degree to which an asset or security can be quickly bought ...
  2. Spread

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

    The deliverable quantity of commodities or financial instruments ...
  4. Volume

    The number of shares or contracts traded in a security or an ...
  5. Volatility

    1. A statistical measure of the dispersion of returns for a given ...
  6. Most Active

    The stocks on an exchange that had the highest volume over a ...
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  1. What types of stocks have a small difference between bid and ask prices?

    Generally, stocks that offer high liquidity have tight bid-ask spreads. Stocks that have a high volume and trade on a daily ... Read Full Answer >>
  2. What types of stocks have a large difference between bid and ask prices?

    The bid-ask spread is the difference between the highest offered purchase price and the lowest offered sales price for a ... Read Full Answer >>
  3. Why is trading volume important to investors?

    Trading volume, or volume, is the number of shares or contracts that indicates the overall activity of a security or market ... Read Full Answer >>
  4. Who was the first person charged by the SEC?

    This dubious honor belongs to Michael J. Meehan. Meehan was a stock market manipulator who operated in the stock pools that ... Read Full Answer >>
  5. Do stocks that trade with a large daily volume generally have less volatility?

    Stock volatility refers to a drastic decrease or increase in value experienced by a given stock within a given period. There ... Read Full Answer >>
  6. How do I measure option liquidity?

    An option is a financial instrument that gives the holder the right to purchase shares in a company at a certain set price ... Read Full Answer >>
  7. What are the determinants of a stock's bid-ask spread?

    Stock exchanges are set up to assist brokers and other specialists in coordinating bid and ask prices. The bid price is the ... Read Full Answer >>
  8. What number of shares determines adequate liquidity for a stock?

    Liquidity refers to how easy it is to buy and sell shares without seeing a change in price. If, for example, you bought ... Read Full Answer >>

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