What does volume mean in stocks?


What does volume mean in stocks?

Stock Trading:

Many investors buy shares in a stock and have a floor and ceiling that they use to determine how long they will hold that stock. If a stock's value drops to a certain point, investors will divest to avoid further losses, and if a stock rises above a certain value, then investors may seek to exit while terms are favorable.

Answer and Explanation:

Volume in stock refers to the total number of sales that occur in a given period of time. A large price change with a small volume of sales may not be a significant indicator of change in the value of a stock, while a small price change at a high volume may indicate significant changes to the value of a company and indicate a trend. Stock volume can be measured for a specific stock or can be measured for a market overall and is part of the analysis of variation in price by financial experts.

Learn more about this topic:

Investment Opportunities in Stocks and Bonds


Chapter 25 / Lesson 16

Investors often turn to the stock and bond markets when investing their money. Each market offers opportunities and risks for the individual investor. In this lesson, we'll explore the nature of these investments.

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