What is Active by Volume?

“Active by Volume” refers to the securities that traded the most over a particular duration. Volume in stock market is the amount of security bought or sold in a trading session. Thus, the stocks with the highest trading volume are known to be the most active by volume or the NSE volume gainers.

Understanding trading volume

Every transaction of an asset contributes to its share market volume. The trading volume in the stock market depicts the securities with high movement and increased volatility. This volatility fuels investors to buy or sell certain stocks, depending on their approach, whether bullish or bearish and their financial goals. A higher trading volume would indicate better liquidity and a more active market for traders. 

How to calculate the trading volume

The number of transactions of a particular security in one trading day is its trading volume. For instance, if a stock has been transacted fourteen times in a trading session, then the trading volume for that stock is fourteen. NSE India updates the trading volume of a stock regularly on its website. 

What does trading volume indicate?

Technical analysts see trading volume as proof of movement credibility. If a significant movement in a stock is backed by a high volume, then the movement holds credible strength. Similarly, if there is little volume to explain a significant movement, then traders are reluctant to ride that wave.

What is the significance of trading volume?

A higher trading volume indicates an event or some news at the company. Usually, a company’s stock exhibits a high trading volume when the company publishes its quarterly results, forecasts, or announces something like a merger or a share buyback.