Loading the player...

What is 'Volume'

Volume is the number of shares or contracts traded in a security or an entire market during a given period of time. For every buyer, there is a seller, and each transaction contributes to the count of total volume. That is, when buyers and sellers agree to make a transaction at a certain price, it is considered one transaction. If only five transactions occur in a day, the volume for the day is five.

Volume as Indicator 'Volume'

Volume is an important indicator in technical analysis as it is used to measure the relative worth of a market move. If the markets make a strong price movement, then the strength of that movement depends on the volume for that period. The higher the volume during the price move, the more significant the move.

This is a list of the most and least actively traded stocks in the S&P 500 measured on a daily basis. Since it changes throughout the day, add stocks to your personal watchlist so you can track their volume and other metrics whenever you want.



Fundamental analysis is based on company performance and is used to determine which stock to buy. Technical analysis is based on price and is used to determine when to buy. Technical analysts are primarily looking for entry and exit price points, and volume levels provide clues about where the best entry and exit points are located.

Volume Trends Confirm Strength

Volume is one of the most important measures of strength for traders and technical analysts. Put simply, volume refers to the number of contracts traded. For any trade to occur, the market needs to produce a buyer and a seller. A transaction occurs when buyers and sellers meet and is referred to as the market price. From an auction perspective, when buyers and sellers become particularly active at a certain price, it means there is a lot of volume.

Analysts use bar charts to quickly determine the level of volume. Bars also provide easier identification of trends in volume. When bars are higher than average, it is a sign of high volume or strength at a particular market price. In this way, analysts use volume as a way to confirm a price movement. If volume increases when the price moves up or down, it is considered a price movement with strength.


If traders want to confirm a reversal on a level of support, or floor, they look for high buying volume. Conversely, if traders are looking to confirm a break in the level of support, they look for low volume from buyers. If traders want to confirm a reversal on a level of resistance, or ceiling, they look for high selling volume. Conversely, if traders are looking to confirm a break in the level of support, they look for high volume from buyers.

  1. Average Daily Trading Volume - ...

    The average amount of individual securities traded in a day or ...
  2. Volume Analysis

    The examination of the number of shares or contracts of a security ...
  3. Net Volume

    A term in technical analysis that represents a security's uptick ...
  4. Positive Volume Index - PVI

    An indicator used in technical analysis that is based on days ...
  5. Downtick Volume

    The share volume of a security that trades at a price lower than ...
  6. Uptick Volume

    The volume of shares of a security that are traded when the price ...
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.
  2. Investing

    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.
  3. Trading

    What's In Store For These Stocks With Unusually High Volume?

    For these four stocks with recent usually high volume, the overall technical picture will be used to help gauge in which direction the next tradable moves will be.
  4. Investing

    How To Choose Stocks For Day Trading

    Day trading entails trading a stock several times over a day in an effort to profit on its price movements. It’s a risky strategy, but can pay big returns.
  5. Investing

    The Ins And Outs of Seller-Financed Real Estate Deals

    There's more than one way to buy or sell a house. Seller financing presents yet another unique option.
  6. Trading

    Options Trading Volume And Open Interest

    Learn how these two statistics can give you an edge in trading options.
  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 are the main differences and similarities between Money Flow Index & On Balance ...

    Understand the basics of On Balance Volume and the Money Flow Index, including their similarities and differences in terms ... Read Answer >>
  4. How can I calculate a company's forward p/e in Excel?

    Discover why trading volume is higher when the price of a security changes. Supply and demand is the mechanism through which ... Read Answer >>
  5. What are the best technical indicators to complement the Positive Volume Index (PVI)?

    Discover several of the best technical indicators that traders and market analysts use in conjunction with the Positive Volume ... Read Answer >>
Hot Definitions
  1. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  2. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  3. Entrepreneur

    An entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture.
  4. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  5. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  6. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
Trading Center