The average daily trading volume of common shares during the trailing 12 months. This is expressed in unit shares. This figure is also calculated for closed-end funds.
Benefit
A stock with a high daily volume is a stock that is highly valued by the market, or, in some cases, was once highly valued and has experienced a fall in value resulting in a high number of sell-offs. Conversely, a stock with a low average daily volume is likely to be a stock in which there is little interest. Other factors, such as relative size or lack of name recognition may also contribute to a low average daily volume.
Origin
Quotes for NASDAQ securities are delayed 15 minutes. Quotes for NYSE and AMEX securities are delayed 20 minutes, and are provided by www.sdsmarketwatch.com.
For the Pros
Breaking it Down—Volume and Unit Shares
Volume is the total number of stock shares traded in a particular period. Volume figures are reported daily by exchanges, both for individual issues trading and for the total amount of trading executed on the exchange. Technical analysts place great emphasis on the amount of volume that occurs in the trading of a security or futures contract. A sharp rise in volume is believed to signify future sharp rises or falls in price, because it reflects increased investor interest.
Unit shares are the normal number of shares, bonds, or commodities comprising the minimum unit of trading on an exchange. For stocks, this is usually 100 shares.