Volume Of Trade

AAA

DEFINITION of 'Volume Of Trade'

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.

INVESTOPEDIA EXPLAINS '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. Blackboard Trading

    The buying and selling of commodities and futures contracts off ...
  2. Free-Crowd System

    A system of commodity trading in which floor members can make ...
  3. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  4. Board Broker System

    A system used by commodity exchanges, in which agents are assigned ...
  5. Lock Limit

    Commonly associated with the futures market, a lock limit occurs ...
  6. Volume

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

    Confirming Price Movements With Volume Oscillators

    Use this indicator to validate a change in price direction and moving averages.
  2. Active Trading Fundamentals

    Using Volume Rate Of Change To Confirm Trends

    Wise traders rely on indicators that show a trend in volume, because without supportive volume, a price movement has no conviction.
  3. Options & Futures

    How To Use Volume To Improve Your Trading

    Volume is a simple yet powerful way for traders and investors to increase their profits and minimize risks.
  4. Options & Futures

    How To Read The Market's Psychological State

    Discover what on-balance volume, accumulation/distribution and open interest can tell you about the market mood.
  5. Options & Futures

    Options Trading Volume And Open Interest

    Learn how these two statistics can give you an edge in trading options.
  6. Technical Indicators

    What is a common strategy traders implement when using the Negative Volume Index (NVI)?

    Learn a simple trading strategy that can be created using just a couple of moving averages and the negative volume index indicator.
  7. Trading Strategies

    How effective is creating trade entries after spotting a Multiple Tops pattern?

    Understand the basics of trading based on a multiple tops chart pattern, and learn what elements should be of primary focus to achieve optimal results.
  8. Trading Strategies

    Why is the Negative Volume Index (NVI) important for traders and analysts?

    Dive into the theory and history of the Negative Volume Index (NVI), a volume-based indicator used to identify and qualify stock market trends.
  9. Options & Futures

    Futures Quotes Explained The "Easy" Way

    If there’s a security whose price fluctuates, there can theoretically be a futures marketplace for it.
  10. Charts & Patterns

    What are the main differences between an Equivolume chart and a Candlestick chart?

    Read about the similarities and differences between how trading information is conveyed in Japanese candlestick charts and in equivolume charts.

You May Also Like

Hot Definitions
  1. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  2. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  3. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  4. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  5. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  6. Law Of Supply And Demand

    A theory explaining the interaction between the supply of a resource and the demand for that resource. The law of supply ...
Trading Center