Knowing which stocks are the most actively traded can provide investors with information about the liquidity of a security, insight into market sentiment about the company and how likely a price increase or decrease will stick. Many financial websites offer lists of daily, monthly or yearly most actives. Below, we will discuss websites that provide additional advantages like more detailed lists, the ability to customize lists and information that is usually behind a paywall.
The average daily trading volume is an important statistic for both traders and investors to understand. The trading volume is the number of shares or contracts in that trade in a given time period, usually one day. The importance of volume lies in its ability to help traders ascertain how and why a security is moving a certain way. Tracking trading volume provides information on how a particular stock is performing, what is driving the stock price, and how strong or weak the move may be. For example, if a stock begins trending upwards and is accompanied by a high trading volume, it is a sign that the upward trend will stick and continue. If a stock is trading upwards and is accompanied by low trading volumes, it is an indication that the trend may be weak and quickly reverse itself. Trading volume can also provide clues on the likelihood of future price movements. Stocks generally have high trading volume when there is news about the company or new significant related information. For a stock to make a significant move or break through a resistance level, usually a high trading volume is needed. The higher the volume, the greater the potential for a price change to stick, which can lead to strong price momentum.
Daily trading volume data is readily available in many trade publications, newspapers, and financial websites. For example, Yahoo! Finance provides the following information on its Market Data page.
The Wall Street Journal also provides an interesting feature; a link to access historical data for the most active stocks on any particular day in the past. This data can be downloaded and used to analyze price movements related to many other variables. Similarly, historical data by year for NYSE stocks can be found at nyxdata.com.
In addition to daily most actively traded stock data, weekly and monthly volume leaders and laggards data can be found, although this data is not as widely distributed as daily most actives. The financialpost.com allows users to view weekly most active data on their Market Data page. It groups its most actives by the overall market as well as by market exchange.
Monthly data is a bit tougher to find. Many sites provide this data as part of a membership, but some sites allow access without membership rights. For example, marketvalue.com allows users to view monthly most traded stocks by volume as well as daily and yearly most traded by volume without a membership.
Understanding trading volume and how it relates to current stock price movements can help traders judge the significance of trends and even forecast future movements. This information, when added to other technical and fundamental analysis data, can complete the picture of a stock and help traders make informed investment decisions. The abundance of financial websites makes finding the most actively traded stocks, especially the daily most actives, very convenient.