Volume Of Trade

What is 'Volume Of Trade'

Volume of trade is the total quantity of futures contracts bought and sold during a trading day. The volume of trade numbers, reported as often as once an hour throughout the current trading day, are estimates. Final, actual figures are reported the following day. In the meantime, investors can use tick volume, or the number of changes in a contract's price, as a surrogate for trade volume, since prices tend to change more frequently with a higher volume of trade.

BREAKING DOWN 'Volume Of Trade'

Volume tells investors about the market's liquidity. Higher volume means higher liquidity and better order execution. When investors feel hesitant about the direction of the stock market, futures trading volume tends to increase. Volume also tends to be higher near the market's opening and closing times, and on Mondays and Fridays. It tends to be lower at lunchtime and before a holiday.

RELATED TERMS
  1. Up Volume

    A stock volume that closes at a price higher than the previous ...
  2. Down Volume

    A stock volume that closes at a price lower than the previous ...
  3. Positive Volume Index - PVI

    An indicator used in technical analysis that is based on days ...
  4. Volume Analysis

    The examination of the number of shares or contracts of a security ...
  5. Uptick Volume

    The volume of shares of a security that are traded when the price ...
  6. Volume

    The number of shares or contracts traded in a security or an ...
Related Articles
  1. Trading

    Interpreting Volume For The Futures Market

    Learn how to read the volume reports, look at the relation to liquidity and interpret volume using open interest.
  2. Trading

    How To Use Volume To Improve Your Trading

    The basic guidelines to analyzing volume may not apply in all situations, but overall, they can help direct entry and exit decisions.
  3. Trading

    How To Tackle Intraday Volume

    Measure the flow of intraday volume to estimate the emotional intensity of the crowd.
  4. Trading

    A Guide To Finding The Most Actively Traded Stocks

    Knowing the trading volume of a stock helps traders understand price movements and forecast future movements. This short guide helps investors locate actively traded data.
  5. Trading

    Volume

    Learn about this measure of stock activity and how investors use it to determine trading opportunities.
  6. Trading

    Options Trading: Volume And Open Interest

    Options traders should look at daily trading volume and open interest to find ideas they might otherwise overlook.
  7. Managing Wealth

    Use Market Volume Data to Determine a Bottom

    Market bottoms often carve out classic volume patterns that let observant traders make fast and accurate calls.
  8. Trading

    What The Market Open Tells You

    The first few moments of trading provide a lot of information. If a trader analyzes this information, it can give a lot of insight into the market's moves for the day.
  9. Markets

    What Message is Low Trading Volume Sending?

    Volume is drying up for U.S. equities. Here's what it means.
  10. Trading

    Using Open Interest To Find Bull/Bear Signals

    Volume should inform your use of this indicator in confirming trends and reversals.
RELATED FAQS
  1. Why is the Uptick Volume important for traders and analysts?

    Find out why technical analysts and traders keep track of uptick volume to better assess the momentum of a stock's price ... Read Answer >>
  2. Why is trading volume important to investors?

    Learn about trading volume, its importance and how investors analyze volume to confirm a trend or reversal in a security. Read Answer >>
  3. What is the Uptick Volume formula and how is it calculated?

    Learn more about uptick volume, a measurement of the number of trades that take place during a time when an asset's price ... Read Answer >>
  4. What is the Positive Volume Index (PVI) formula and how is it calculated?

    Understand how traders and analysts use the Positive Volume Index indicator, the theory behind it and the formula used to ... Read Answer >>
  5. Why is the Time Segmented Volume (TSV) important for traders and analysts?

    Find out why the Time Segmented Volume (TSV) indicator is considered unique among other types of volume oscillators used ... Read Answer >>
  6. What are the best technical indicators to complement the Uptick Volume?

    See how uptick volume can be used to help confirm price trends from nearly every trend-following indicator, especially when ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center