In the stock market, what does the VOLUME # reflect?

Question

"Todays Volume": Is it the total amount of trades which changed hands that day, i.e. bought and sold? Or is it really more complex than that? (Options, etcc)

Answer 1

Volume is simply the number of shares traded, not transactions. But the reason volume is relavent, particularly for traders is it is a reflection of market participation and is an indication of conviction of a particular move in the market.

For example, if the dow is up 100 points, and there is above average volume on that day, than it is believed that there was a lot of investors participating and the trend is likely to continue upward. If on the other hand the volume is light, traders will believe the move to be without conviction and not likely to hold up in the subsequent days.

Answer 2

The volume number is the number of SHARES that change hands an not the number of TRADES.  Common sense should tell you that 10,000 shares could change ownership in one trade or ten trades or even 100 trades  It does not include options and does not include some trades made away from the stock exchanges or after market trading.  It is not an exact number for that reason but it is close and is useful for comparison purposes.

Answer 3

Volume is the number of transactions, pure and simple.