Equity Volume

Equity Volume

What is equity volume? Have you ever asked yourself this question? EV or Equity Volume is one of the critical indicators that you need to understand when investing in the stock market.  

Here, we show you how it’s used in trading. And we’ll also provide tips on analyzing and using equity volume to your advantage. 

What is Equity Volume?

Equity volume is the total number of shares traded in a day on a particular exchange. Equity volume can also measure a particular stock’s activity. 

Equity volume is one of the most critical factors of the stock market and how it works. Any investor needs to understand how equity volume works in the market.  

What are the basics of Equity Volume?

To understand equity volume, one must first understand what equity is. Equity is the portion of a company’s assets owned by shareholders. This can be thought of as the company’s “net worth.” The equity volume is the number of shares traded on a stock exchange in a given period. 

There are two types of equity volume: traded volume and outstanding volume. Traded volume is the number of shares traded on a stock exchange in a given period. Outstanding volume is the number of shares held by investors, including institutional and individual investors. 

The volume of equity can be affected by many factors, including the overall level of economic activity, the company’s performance, and investors’ perceptions. Companies tend to do well when there is high economic activity and equity volume typically increases then. Conversely, companies perform poorly and when there is low economic activity, equity volume usually decreases. 

Investors’ perceptions of a company can also affect equity volume. Investors who believe that a company is doing well are more likely to buy its stock, and equity volume will increase. Investors who think a company is doing poorly are more likely to sell its stock, and equity volume will decrease. 

In general, equity volume is a good indicator of a company’s health and the overall level of economic activity. Investors are confident in a company and the economy when equity volume is high. When equity volume is low, investors are less optimistic about the company and the economy. 

Factors affecting Equity Volume

Numerous factors can affect the volume of equity trading in a given market. Some of the most significant include the economy’s overall health, the level of activity in other asset classes (such as bonds or commodities), and the amount of political or economic uncertainty in the market. 

When the economy is solid, and other asset classes are relatively quiet, equity trading volume tends to be higher. Conversely, when the economy is weak or other asset classes are more active, equity trading volume tends to be lower. 

Depending on investor sentiment, political and economic uncertainty can also lead to increased or decreased equity trading volume. 

How to analyze Equity Volume?

There are different ways to analyze equity volume. 

  • One way is to look at the volume of shares traded. Doing this can give you a glimpse of how active the market is and how much interest there is in the stock. 
  • Another way to analyze equity volume is to look at the value of shares traded. This can guide you on how much money is invested in the stock. 
  • Finally, you can look at the ratio of buy orders to sell orders. This can give you an idea of whether there is more buying or selling pressure in the market. 

Some Examples of Equity Volume

A number of different types of equity volume can be used to measure the performance of a stock. Some of the most common are: 

  • Average daily volume 

This is the number of shares that are traded each day, on average. It can be used to measure the overall activity in a stock. 

  • Total volume 

This is the total number of shares traded in a stock over a given period. It can be used to measure the overall interest in a stock. 

  • Institutional volume 

This is the number of shares traded by institutional investors, such as banks and hedge funds. It can be used to measure the level of interest of these types of investors. 

  • Retail volume 

This is the number of retail shares investors, such as individuals, have traded. It can be used to measure the level of interest of these types of investors. 

  • Block volume 

This is the number of shares traded in a single transaction. It can be used to measure the level of activity in a stock. 

  • Odd-lot volume  

This is the number of shares traded in an odd lot, a transaction that is not evenly divisible by 100. It can be used to measure the level of activity in a stock. 

Frequently Asked Questions

In the stock market, volume is the number of shares or contracts traded in a given period, typically a day. Volume is a popular technical indicator used by traders and investors to determine the strength of a market move. For example, if a stock is trading with high volume, it means there is a lot of interest in the stock, and it is being traded actively.

Stock volume is the number of shares of a particular stock traded during a given period. It is a measure of market activity and can be used to identify trends.  

For example, if 100,000 shares of N Company are traded in a single day, then the volume for that day is 100,000.

A volume trading strategy is a type of trading strategy that is based on the volume of shares traded in a stock or other securities. This strategy is often used by day traders and other short-term traders looking to take advantage of changes in the market. 

This strategy can be used in any market but is most commonly used in the stock market. It can be a complex strategy to master but can be very profitable for those who can do so. 

    Read the Latest Market Journal

    Weekly Updates 26/2/24 – 1/3/24

    Published on Feb 28, 2024 47 

    This weekly update is designed to help you stay informed and relate economic and company...

    All-in-One Guide to Investing in China via ETFs

    Published on Feb 27, 2024 271 

    Start trading on POEMS! Open a free account here! Why China? In the vast landscape...

    Navigating the Post-Inflation Landscape in 2024: Top 10 US Markets Key Events to Look out for

    Published on Feb 23, 2024 302 

    Start trading on POEMS! Open a free account here! In 2023, the United States experienced...

    From Boom to Bust: Lessons from the Barings Bank Collapse

    Published on Feb 23, 2024 60 

    Barings Bank was one of the oldest merchant banks in England with a long history...

    Decoding FX CFD 2.0

    Published on Feb 20, 2024 66 

    This article is aimed at availing information and knowledge essential to intermediate forex traders. It...

    Weekly Updates 19/2/24 – 23/2/24

    Published on Feb 19, 2024 89 

    This weekly update is designed to help you stay informed and relate economic and company...

    Unlock Prosperity with 5 Sure-Fire Financial Instruments!

    Published on Feb 14, 2024 197 

    In Singapore, the concept of guaranteed returns may evoke the spirit of prosperity, reminiscent perhaps...

    Weekly Updates 12/2/24 –16/2/24

    Published on Feb 13, 2024 70 

    This weekly update is designed to help you stay informed and relate economic and company...

    Contact us to Open an Account

    Need Assistance? Share your Details and we’ll get back to you

    IMPORTANT INFORMATION

    This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

    An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

    Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

    Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

    The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

    The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

    The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

    This advertisement has not been reviewed by the Monetary Authority of Singapore.  

     

    Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
    250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
    Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com