QQQ   317.08 (-1.13%)
AAPL   164.92 (+0.03%)
MSFT   282.30 (+0.71%)
META   168.53 (-1.01%)
GOOGL   116.63 (-0.57%)
AMZN   137.83 (-1.13%)
TSLA   850.00 (-2.44%)
NVDA   170.86 (-3.97%)
NIO   19.17 (-4.96%)
BABA   91.19 (+0.39%)
AMD   95.54 (-4.53%)
MU   59.15 (-3.74%)
T   18.10 (+0.56%)
CGC   2.87 (-12.50%)
GE   74.93 (-0.33%)
F   15.19 (-3.74%)
DIS   108.13 (-0.90%)
AMC   22.45 (-6.30%)
PYPL   94.48 (-1.85%)
PFE   49.78 (+0.42%)
NFLX   229.94 (-1.52%)
QQQ   317.08 (-1.13%)
AAPL   164.92 (+0.03%)
MSFT   282.30 (+0.71%)
META   168.53 (-1.01%)
GOOGL   116.63 (-0.57%)
AMZN   137.83 (-1.13%)
TSLA   850.00 (-2.44%)
NVDA   170.86 (-3.97%)
NIO   19.17 (-4.96%)
BABA   91.19 (+0.39%)
AMD   95.54 (-4.53%)
MU   59.15 (-3.74%)
T   18.10 (+0.56%)
CGC   2.87 (-12.50%)
GE   74.93 (-0.33%)
F   15.19 (-3.74%)
DIS   108.13 (-0.90%)
AMC   22.45 (-6.30%)
PYPL   94.48 (-1.85%)
PFE   49.78 (+0.42%)
NFLX   229.94 (-1.52%)
QQQ   317.08 (-1.13%)
AAPL   164.92 (+0.03%)
MSFT   282.30 (+0.71%)
META   168.53 (-1.01%)
GOOGL   116.63 (-0.57%)
AMZN   137.83 (-1.13%)
TSLA   850.00 (-2.44%)
NVDA   170.86 (-3.97%)
NIO   19.17 (-4.96%)
BABA   91.19 (+0.39%)
AMD   95.54 (-4.53%)
MU   59.15 (-3.74%)
T   18.10 (+0.56%)
CGC   2.87 (-12.50%)
GE   74.93 (-0.33%)
F   15.19 (-3.74%)
DIS   108.13 (-0.90%)
AMC   22.45 (-6.30%)
PYPL   94.48 (-1.85%)
PFE   49.78 (+0.42%)
NFLX   229.94 (-1.52%)
QQQ   317.08 (-1.13%)
AAPL   164.92 (+0.03%)
MSFT   282.30 (+0.71%)
META   168.53 (-1.01%)
GOOGL   116.63 (-0.57%)
AMZN   137.83 (-1.13%)
TSLA   850.00 (-2.44%)
NVDA   170.86 (-3.97%)
NIO   19.17 (-4.96%)
BABA   91.19 (+0.39%)
AMD   95.54 (-4.53%)
MU   59.15 (-3.74%)
T   18.10 (+0.56%)
CGC   2.87 (-12.50%)
GE   74.93 (-0.33%)
F   15.19 (-3.74%)
DIS   108.13 (-0.90%)
AMC   22.45 (-6.30%)
PYPL   94.48 (-1.85%)
PFE   49.78 (+0.42%)
NFLX   229.94 (-1.52%)

Stocks with Unusual Volume

Volume mover stocks are companies with the most shares traded during the current trading day relative to their average trading trading volume. A stock may experience above-average trading volume when important new information affecting the stock's valuation is made known to the public. This creates pressure among investors to either buy or sell the stock, leading to heavier trading volume and strong price momentum in the stock. Explanation of average daily trade volume.

MarketRank evaluates a company based on community opinion, dividend strength, institutional and insider ownership, earnings and valuation, and analysts forecasts.
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Media sentiment refers to the percentage of positive news stories versus negative news stories a company has received in the past week.
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Analyst consensus is the average investment recommendation among Wall Street research analysts.
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Analyst ConsensusUpgrade to All Access to use the All Ratings Filter
CompanyCurrent PriceVolume GrowthVolumeAverage VolumeDollar VolumeIndicator(s)
eFFECTOR Therapeutics, Inc. stock logo
EFTR
eFFECTOR Therapeutics
$0.65
-27.4%
+13,126.8%57.55 million435,121$37.52 millionGap Up
Verona Pharma plc stock logo
VRNA
Verona Pharma
$10.03
+44.3%
+11,187.8%37.03 million328,074$371.43 millionUpcoming Earnings
Analyst Report
News Coverage
Gap Up
ZK International Group Co., Ltd. stock logo
ZKIN
ZK International Group
$1.18
-5.6%
+6,894.9%19.57 million279,845$23.10 millionNews Coverage
Gap Up
Graybug Vision, Inc. stock logo
GRAY
Graybug Vision
$1.17
+21.0%
+4,870.2%12.99 million261,399$15.20 millionUpcoming Earnings
Gap Up
T2 Biosystems, Inc. stock logo
TTOO
T2 Biosystems
$0.12
-6.9%
+4,279.5%313.52 million7.16 million$37.94 millionUpcoming Earnings
Analyst Report
News Coverage
Gap Up
HLBZ
Helbiz
$1.44
-10.6%
+4,008.7%155.69 million3.79 million$224.20 millionUpcoming Earnings
Gap Up
ReTo Eco-Solutions, Inc. stock logo
RETO
ReTo Eco-Solutions
$0.92
+25.4%
+3,864.4%37.53 million946,649$34.57 millionNews Coverage
Gap Up
BBQ Holdings, Inc. stock logo
BBQ
BBQ
$17.18
+46.5%
+3,794.9%1.60 million41,130$27.52 millionUpcoming Earnings
Gap Up
Trading Halted
TradeUP Global Co. stock logo
TUGC
TradeUP Global
$5.39
-9.8%
+3,000.4%1.89 million60,900$10.19 millionGap Up
Medicenna Therapeutics Corp. stock logo
MDNA
Medicenna Therapeutics
$0.95
-46.6%
+2,913.8%3.40 million112,923$3.23 millionUpcoming Earnings
News Coverage
Gap Down
FaZe Holdings Inc. stock logo
FAZE
FaZe
$20.08
+42.4%
+2,857.3%12.33 million416,901$247.57 millionOptions Volume
News Coverage
Quanterix Co. stock logo
QTRX
Quanterix
$7.46
-54.8%
+2,760.1%11.93 million417,031$88.98 millionAnalyst Downgrade
News Coverage
Gap Down
SAI
SAI.TECH Global
$5.39
-9.8%
+2,632.7%1.89 million69,095$10.19 millionNews Coverage
Gap Up
Trading Halted
Aytu BioPharma, Inc. stock logo
AYTU
Aytu BioPharma
$0.28
-51.7%
+2,095.1%16.75 million763,044$4.71 millionNews Coverage
Gap Down
Ontrak, Inc. stock logo
OTRK
Ontrak
$0.79
+16.1%
+1,736.2%18.72 million1.02 million$14.79 millionNews Coverage
Gap Up
Akanda Corp. stock logo
AKAN
Akanda
$1.25
+25.0%
+1,397.8%19.13 million1.28 million$23.92 millionNews Coverage
Gap Down
Phathom Pharmaceuticals, Inc. stock logo
PHAT
Phathom Pharmaceuticals
$8.86
+21.5%
+1,354.9%3.16 million216,978$27.97 million
Aquestive Therapeutics, Inc. stock logo
AQST
Aquestive Therapeutics
$1.04
+7.2%
+1,277.0%7.99 million580,112$8.31 millionEarnings Report
Analyst Revision
Clearfield, Inc. stock logo
CLFD
Clearfield
$113.88
+3.1%
+1,272.7%3.03 million220,503$344.69 millionInsider Selling
CorMedix Inc. stock logo
CRMD
CorMedix
$3.20
-57.4%
+1,186.0%4.97 million386,559$15.91 millionUpcoming Earnings
News Coverage
Gap Down
Avaya Holdings Corp. stock logo
AVYA
Avaya
$0.61
-45.5%
+1,177.3%55.20 million4.32 million$33.68 millionNews Coverage
Gap Down
CyberOptics Co. stock logo
CYBE
CyberOptics
$53.03
+1,175.3%1.21 million94,560$63.95 millionAnalyst Downgrade
News Coverage
ADAL
Anthemis Digital Acquisitions I
$10.02
+0.1%
+1,171.9%945,18474,315$9.47 million
BNSO
Bonso Electronics International
$5.79
-26.5%
+1,098.7%1.19 million99,656$6.92 millionNews Coverage
Gap Down
AeroClean Technologies, Inc. stock logo
AERC
AeroClean Technologies
$7.27
+60.1%
+981.1%47.75 million4.42 million$347.11 millionUpcoming Earnings
News Coverage
GoodRx Holdings, Inc. stock logo
GDRX
GoodRx
$7.81
+0.6%
+953.8%27.03 million2.56 million$211.09 millionEarnings Report
Analyst Report
Options Volume
News Coverage
Oportun Financial Co. stock logo
OPRT
Oportun Financial
$7.70
-28.5%
+897.4%1.98 million198,384$15.24 millionEarnings Report
Analyst Report
News Coverage
Gap Down
Trading Halted
Atara Biotherapeutics, Inc. stock logo
ATRA
Atara Biotherapeutics
$4.69
+29.2%
+867.5%14.54 million1.50 million$68.20 millionAnalyst Report
News Coverage
Gap Up
Mersana Therapeutics, Inc. stock logo
MRSN
Mersana Therapeutics
$7.00
+33.3%
+863.5%15.89 million1.65 million$111.26 millionAnalyst Report
News Coverage
Gap Up
Celsius Holdings, Inc. stock logo
CELH
Celsius
$93.38
-7.8%
+863.4%11.20 million1.16 million$1.05 billion
SilverSun Technologies, Inc. stock logo
SSNT
SilverSun Technologies
$3.68
+17.6%
+844.5%1.40 million147,941$5.14 millionNews Coverage
Gap Down
Trading Halted
BellRing Brands, Inc. stock logo
BRBR
BellRing Brands
$23.69
-8.8%
+793.2%9.40 million1.05 million$222.68 millionEarnings Report
Analyst Report
News Coverage
Gap Down
NuZee, Inc. stock logo
NUZE
NuZee
$0.77
-8.3%
+777.0%393,61344,882$303,082.01Upcoming Earnings
News Coverage
PennantPark Floating Rate Capital Ltd. stock logo
PFLT
PennantPark Floating Rate Capital
$12.20
-7.5%
+775.2%2.71 million309,304$33.03 millionDividend Announcement
Analyst Revision
News Coverage
Positive News
Gap Down
Fast Radius, Inc. stock logo
FSRD
Fast Radius
$0.72
+12.5%
+733.3%6.64 million796,895$4.78 millionUpcoming Earnings
News Coverage
Avalara, Inc. stock logo
AVLR
Avalara
$91.77
-0.1%
+724.4%10.76 million1.31 million$987.74 millionEarnings Report
Analyst Report
News Coverage
CSLM
Consilium Acquisition Corp I
$9.84
+721.7%478,57658,240$4.71 million
iShares Asia 50 ETF stock logo
AIA
iShares Asia 50 ETF
$59.29
-1.0%
+716.2%814,81399,832$48.31 million
Southern First Bancshares, Inc. stock logo
SFST
Southern First Bancshares
$44.17
+0.9%
+700.1%162,75020,341$7.19 millionAnalyst Downgrade
Applied DNA Sciences, Inc. stock logo
APDN
Applied DNA Sciences
$4.97
+2.1%
+696.5%22.16 million2.78 million$110.14 millionUpcoming Earnings
Gap Up
Trading Halted
BSMR
Invesco BulletShares (R) 2027 Municipal Bond ETF
$24.10
-0.2%
+661.5%73,3609,633$1.77 million
Professional Holding Corp. stock logo
PFHD
Professional
$29.50
-0.5%
+659.0%544,10371,689$16.05 millionAnalyst Downgrade
News Coverage
American Campus Communities, Inc. stock logo
ACC
American Campus Communities
$65.42
+0.1%
+648.8%18.86 million2.52 million$1.23 billion
Bed Bath & Beyond Inc. stock logo
BBBY
Bed Bath & Beyond
$9.79
-14.2%
+638.6%73.34 million9.93 million$718.00 millionAnalyst Downgrade
News Coverage
Gap Up
SKYX Platforms Corp. stock logo
SKYX
SKYX Platforms
$3.60
-41.4%
+619.0%3.15 million437,790$11.33 millionLockup Expiration
News Coverage
Gap Down
Moog Inc stock logo
MOG.B
Moog
$84.45
+6.9%
+604.7%10515$8,867.25Gap Up
Neogen Co. stock logo
NEOG
Neogen
$21.27
-1.1%
+597.4%5.89 million844,070$125.21 million
Vascular Biogenics Ltd. stock logo
VBLT
Vascular Biogenics
$0.24
-4.4%
+583.5%8.43 million1.23 million$2.03 millionUpcoming Earnings
Analyst Report
BSMM
Invesco BulletShares (R) 2022 Municipal Bond ETF
$25.30
-0.1%
+579.9%152,22222,390$3.85 million
Bright Minds Biosciences Inc. stock logo
DRUG
Bright Minds Biosciences
$1.01
-1.9%
+573.2%426,48763,353$430,751.87Positive News
Reviva Pharmaceuticals Holdings, Inc. stock logo
RVPH
Reviva Pharmaceuticals
$0.67
+0.9%
+551.9%2.34 million359,005$1.56 millionUpcoming Earnings
Vertex Energy, Inc. stock logo
VTNR
Vertex Energy
$7.80
-44.2%
+549.9%27.91 million4.29 million$217.69 millionOptions Volume
News Coverage
Gap Down
Cedar Realty Trust, Inc. stock logo
CDR
Cedar Realty Trust
$28.93
+0.5%
+543.6%1.74 million270,403$50.35 millionPositive News
American Vanguard Co. stock logo
AVD
American Vanguard
$18.29
-24.3%
+542.8%1.65 million256,266$30.13 millionNews Coverage
Century Therapeutics, Inc. stock logo
IPSC
Century Therapeutics
$13.10
+7.4%
+539.8%714,642111,701$9.36 millionUpcoming Earnings
TWND
Tailwind Acquisition
$10.00
+538.6%477,44074,761$4.77 millionNews Coverage
Positive News
Karuna Therapeutics, Inc. stock logo
KRTX
Karuna Therapeutics
$228.45
-5.3%
+529.4%1.83 million291,372$418.94 millionEarnings Report
Analyst Report
News Coverage
HCI Group, Inc. stock logo
HCI
HCI Group
$60.37
-16.0%
+526.7%665,168106,138$40.16 millionNews Coverage
Gap Down
BSMP
Invesco BulletShares (R) 2025 Municipal Bond ETF
$24.79
-0.1%
+526.2%135,28521,605$3.35 million
VMGA
VMG Consumer Acquisition
$10.01
+521.4%391,87463,064$3.92 million
JCIC
Jack Creek Investment
$9.89
-0.1%
+517.9%439,41071,110$4.35 million
Avalo Therapeutics, Inc. stock logo
AVTX
Avalo Therapeutics
$5.18
+32.1%
+513.4%293,53447,857$1.52 millionEarnings Report
Analyst Revision
Gap Down
The Eastern Company stock logo
EML
Eastern
$21.75
+2.8%
+511.7%52,3158,553$1.14 millionAnalyst Report
News Coverage
American Virtual Cloud Technologies, Inc. stock logo
AVCT
American Virtual Cloud Technologies
$0.16
-2.4%
+499.5%23.96 million4.00 million$3.89 millionGap Up
FFBW
FFBW
$12.38
0.0%
+499.2%77,07112,862$954,138.98News Coverage
ICNC
Iconic Sports Acquisition
$10.07
+498.5%540,78790,356$5.45 million
BSMQ
Invesco BulletShares (R) 2026 Municipal Bond ETF
$24.10
-0.1%
+488.9%79,83713,556$1.92 million
Assure Holdings Corp. stock logo
IONM
Assure
$1.72
-28.0%
+457.3%1.21 million216,835$2.08 millionUpcoming Earnings
Insider Selling
News Coverage
Negative News
Gap Down
Superior Group of Companies, Inc. stock logo
SGC
Superior Group of Companies
$13.93
-25.4%
+451.7%169,53930,728$2.36 millionNews Coverage
Gap Down
Nuvei Co. stock logo
NVEI
Nuvei
$33.03
-21.5%
+446.4%2.08 million381,200$68.80 millionNews Coverage
Gap Down
FAD
First Trust Multi Cap Growth AlphaDEX Fund
$101.74
-1.1%
+441.7%40,8717,545$4.16 millionNegative News
PFDR
Pathfinder Acquisition
$9.86
-0.1%
+437.0%486,86590,659$4.80 million
GigaMedia Limited stock logo
GIGM
GigaMedia
$1.59
+432.6%165,25931,028$262,761.81Analyst Report
Gap Up
WeTrade Group, Inc. stock logo
WETG
WeTrade Group
$16.99
-7.2%
+426.4%106,76720,282$1.81 millionUpcoming Earnings
News Coverage
Gap Down
Trading Halted
OHAA
OPY Acquisition Corp. I
$9.90
-0.2%
+418.9%300,20357,855$2.97 million
TMKR
Tastemaker Acquisition
$9.97
+417.9%206,87139,947$2.06 million
IS
ironSource
$4.20
-11.2%
+417.8%45.63 million8.81 million$191.64 millionUpcoming Earnings
MYMD
MyMD Pharmaceuticals
$5.80
+1.8%
+416.9%702,025135,825$4.07 millionUpcoming Earnings
Freshpet, Inc. stock logo
FRPT
Freshpet
$47.84
-15.1%
+414.2%3.60 million700,532$172.34 millionEarnings Report
Analyst Report
Analyst Revision
News Coverage
Gap Down
BCAC
Brookline Capital Acquisition
$10.65
-7.1%
+412.6%203,42539,682$2.17 millionGap Down
ChipMOS TECHNOLOGIES INC. stock logo
IMOS
ChipMOS TECHNOLOGIES
$22.58
-2.8%
+411.6%150,16829,355$3.39 million
Founder SPAC stock logo
FOUN
Founder SPAC
$9.53
+2.1%
+408.3%443,17887,182$4.22 million
DPCS
DP Cap Acquisition Corp I
$9.99
+406.6%352,46369,575$3.52 million
10X Capital Venture Acquisition Corp. II stock logo
VCXA
10X Capital Venture Acquisition Corp. II
$9.93
+0.1%
+404.2%277,04454,948$2.75 million
Nielsen Holdings plc stock logo
NLSN
Nielsen
$27.52
+21.2%
+404.0%33.06 million6.56 million$909.92 millionGap Up
ChemoCentryx, Inc. stock logo
CCXI
ChemoCentryx
$50.79
-0.2%
+400.4%8.32 million1.66 million$422.33 millionInsider Selling
News Coverage
ICU Medical, Inc. stock logo
ICUI
ICU Medical
$166.31
-11.6%
+399.5%1.04 million207,718$172.54 millionEarnings Report
Analyst Report
News Coverage
Gap Down
Shapeways Holdings, Inc. stock logo
SHPW
Shapeways
$0.90
-0.9%
+398.3%809,949162,547$728,954.10Upcoming Earnings
Gap Up
Quanergy Systems, Inc. stock logo
QNGY
Quanergy Systems
$0.33
-26.6%
+396.0%8.91 million1.80 million$2.94 millionUpcoming Earnings
News Coverage
Gap Up
IBTD
iShares iBonds Dec 2023 Term Treasury ETF
$24.87
+395.0%500,878101,182$12.46 millionPositive News
Endo International plc stock logo
ENDP
Endo International
$0.40
-39.7%
+395.0%119.23 million24.09 million$48.05 millionUpcoming Earnings
News Coverage
Gap Down
Kingstone Companies, Inc. stock logo
KINS
Kingstone Companies
$4.56
+6.5%
+393.2%56,13211,381$255,961.92Upcoming Earnings
Positive News
Boqii Holding Limited stock logo
BQ
Boqii
$2.43
+0.8%
+393.2%714,551144,890$1.74 million
EVO Payments, Inc. stock logo
EVOP
EVO Payments
$33.50
+0.1%
+391.6%1.99 million405,586$66.79 million
Otonomo Technologies Ltd. stock logo
OTMO
Otonomo Technologies
$0.70
-1.1%
+388.9%1.95 million397,947$1.35 millionPositive News
Otonomy, Inc. stock logo
OTIC
Otonomy
$0.38
+7.8%
+388.0%3.37 million690,238$1.28 million
ObsEva SA stock logo
OBSV
ObsEva
$0.31
+6.6%
+385.7%5.20 million1.07 million$1.59 millionUpcoming Earnings
Gap Up
Pulmatrix, Inc. stock logo
PULM
Pulmatrix
$4.92
-6.3%
+382.4%244,17050,619$1.20 millionAnalyst Report
News Coverage
Gap Up
TWLV
Twelve Seas Investment Company II
$9.84
+372.8%349,94574,021$3.44 million
Kyndryl Holdings, Inc. stock logo
KD
Kyndryl
$10.89
-4.7%
+371.0%11.28 million2.39 million$122.81 millionInsider Buying
Gap Down
Why Average Daily Trading Volume Matters to Every Investor

Understanding the significance of volume can help investors focus on what really matters

One measure of demand for buying or selling a security is its trading volume. In general, higher trading volume supports strong price movement. But how do investors know when volume is really high? Like many other metrics such as price-to-earnings (P/E) ratio, trading volume varies for different stocks and different sectors. That’s where investors can look to a stock’s average daily trading volume.

This article will help you understand the average daily trading volume, what it can tell investors, what causes it to change significantly, and how it can be used as part of a trading system.

What is Average Daily Trading Volume?

The average daily trading volume (ADTV) is simply the average amount of shares traded each day for an equity. To calculate ADTV, find the total volume of shares traded over a certain period of time and divide that number by the desired time period. The most commonly used time frames associated with ADTV are monthly, quarterly, and yearly (annual).

Most financial websites and trading platforms provide the average daily trading volume for a security. Additionally, stock charts can show you volume as it relates to price movement. This gives investors a clear picture of specific patterns related to trading volume.

Why is Average Daily Trading Volume Significant?

Average daily trading volume is significant in the same way that a simple moving average (SMA) is significant. The SMA smooths out price movement. The ADTV smooths out volume. On any given day, a security may have higher or lower trading volume for any number of reasons. Knowing the ADTV gives investors a clearer understanding of investor sentiment.

What an Increase in ADTV Means - Average daily trading volume tells investors how much interest a security is generating. This helps them determine the liquidity of that security (i.e. how easy it is to trade). Simply put, an average daily trading volume that is increasing means there is a significant commitment by traders. This tells traders that there are many available buyers and sellers, making it easy to execute a trade.

When the price of an equity is consolidating, investors want to see evidence of higher-than-average trading volume along with a rising stock price. This is a bullish signal because it confirms that more buyers are entering the market.

What a decline in ADTV means - Typically a downturn in average daily trading volume means that there is less enthusiasm about a particular security. This means that there are fewer committed buyers. And that means there is less liquidity in that security. For a day trader looking to enter an exit a position quickly, a security that is seeing a downturn in ADTV may be more difficult to buy and sell quickly.

For short sellers, a lower-than-average trading volume along with a falling stock price means that there may not be sufficient downward pressure on the stock to execute a trade. Conversely, long investors may view a stock price that is falling on low volume as an opportunity to accumulate more shares because selling pressure is not that strong.

What Are Reasons For Changes in Trading Volume?

Here are a few examples of situations that may affect the average daily trading volume of a given security:

  • An upcoming earnings report – Trading volume tends to go up in a stock in the period immediately before and after it releases earnings. If analysts and investors expect a company to post better-than-expected earnings, buying demand will increase. Conversely, if a company is expected to report disappointing earnings, selling pressure will increase.
  • An upcoming ex-dividend date – For dividend-paying stocks, trading volume will typically increase prior to the company’s ex-dividend date. The ex-dividend date is the date before which an investor must be a shareholder of record in order to receive a dividend payment.
  • Analyst reports – Trading volume may move higher or lower in response when analysts issue a new revision to a stock and/or their price target for the stock.
  • News coverage – A company can make news for positive and negative reasons. Depending on the reason for the news coverage, trading volume may move higher or lower.
  • Changes in institutional buying – There are times of year, specifically the period between June through August that institutional investors are less active in the market. During this time, you may see prices changing based on significantly below average volume.

Should Buy-and-Hold Investors Focus on ADTV?

Average daily trading volume is a technical indicator. Technical analysis is a trading strategy that is used by active traders to determine when to enter (buy) or exit (sell) a position. These investors are typically looking to buy and sell a security, often times in the same day. For that reason, they use average daily trading volume to select securities. 

Investors with a long position in a stock are generally more interested in fundamental analysis. That means a monthly or quarterly ADTV does not hold much significance. However, if the annual ADTV has been trending lower over a number of years, it may be a sign that there are other problems with the stock.

How Traders Use ADTV

Investors who use annual daily trading volume in their trading understand that the relationship between volume and price comes down to supply and demand.

When investors want to buy or sell a stock, there has to be investors on the other end of that trade. The average daily trading volume can signal to an investor that an event has occurred that is causing trading demand to increase.

But simply knowing that there is trading demand is not sufficient. While average daily trading volume can help confirm to a trader that a security is being actively traded, it does not, by itself, indicate price movement one way or another. There can be both high buying volume and high selling volume.

This is why, as part of a trading system, average trading volume is always secondary to price. To make a more informed decision about what the average daily trading volume means, investors will look at price movement. Here are a few ways that investors use volume in their trading:

To Confirm Convergence - When the price is moving in the same direction as volume (that is the price is rising when volume is increasing or conversely the price is falling as demand is decreasing), that is called convergence. This is a good indicator that a trend is likely to continue and prices are likely to continue in the direction they are going.

To Confirm Divergence - When the price of a security is moving in the opposite direction from its volume this is called divergence and it generally means that any trend that was associated with the security is weakening.  If price is rising as demand is falling it may mean that support for a price is losing steam. If the opposite is happening and price is falling but demand is rising, it could be a clue that the stock may be ready to rally.

To Observe What Happens When Price Meets Resistance - In any rally, prices will reach a level where buyers take a breather. This is called a resistance level. In order for prices to move past this level, there has to be significant volume. Therefore, traders look at securities that are trading above the average daily trading volume because they are more likely to push past a resistance level.

  • If the price continues to advance beyond a resistance level and the security continues to have an above average volume – This is a bullish signal that implies investors are enthusiastic. And enthusiasm leads to more buying and a price that will continue to climb.
  • If the price continues to fall below a resistance level and continues to have an above average volume – This is a bullish signal for short sellers because the combination of negative price movement with advancing volume signifies a high level of investor anxiety. This is likely to produce more selling and a price that will continue to decline.

Some Final Thoughts on Average Daily Trading Volume

Average daily trading volume (ADTV) is the average amount of shares traded each day for an equity. ADTV is a technical indicator that gives investors a snapshot of the liquidity in a stock over a specific time period (usually monthly, quarterly, or annually). 

An informed investor can and should, at the very least, be aware of what an average daily trading is and what it may be saying about their investment. But the extent to which it impacts their trading habits really depends on what kind of investor they are.

ADTV is only one data point that investors use. But as this article shows it can tell investors and traders a great deal about investor sentiment. Understanding that sentiment helps minimize risk by pointing investors towards stocks that have liquidity (i.e. a committed group of buyers and sellers). However, ADTV is always secondary to price movement. Ultimately investors want to see both high demand for a stock and strong price movement.

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