Trading volume (exchange)
Trading volume (also called volume or stock exchange turnover ) is understood to mean the sales volume or turnover of financial products such as securities or financial contracts traded on an exchange in a certain period of time .
General
The trading volume is a measure of both the operating size of an exchange and the assessment of market breadth , market depth or market liquidity of a specific financial product. Low trading volume restricts market breadth, market depth or market liquidity. The exchange turnover can be trading in a specific trading object , all objects in a specific exchange segment or the turnover of an entire market .
The trading activities on stock markets are usually characterized by the fact that there is a parallel development of stock price and stock exchange turnover, which is examined by the chart analysis . The development of the stock market turnover over a certain period is sales performance . This is an important figure in technical analysis . It allows conclusions to be drawn about the trading strategy of the market participants and can provide information about the formation or reversal of stock market trends .
Stock index
The stock exchange turnover also plays a role in the assignment of a share to a share index . So comprising DAX 30 largest and (based on the free float - market capitalization ) liquidate most representative companies in the German stock market and approximately represents 80 percent of the market capitalization of listed companies in Germany. The German stock exchange decides periodically according to the trading volume and market capitalization on the composition of the indices.
detection
The stock exchange turnover is calculated from the market value of the stocks , bonds and investment certificates traded on a trading day . The market value, in turn, results from the market price and the number of financial products traded.
- Market capitalization
Anzahl der emittierten Aktien: 1.100.000 Stück
- Anzahl der selbst gehaltenen Aktien: 100.000 Stück
= Streubesitz in Umlauf: 1.000.000 Stück
Aktueller Börsenkurs je Aktie: 50 EUR
Marktkapitalisierung: 50.000.000 EUR
The market capitalization is important when assigning a share to a share index, for example the DAX. The lower the free float, the lower the market capitalization and vice versa.
Market capitalization reflects the maximum possible trading volume of a share on a specific trading day. If you compare it with the actual stock exchange turnover, the result is the trading share of this share in its total maximum possible trading volume.
taxation
The stock exchange turnover of an individual market participant can also be the tax base for the exchange turnover tax , which is levied in some countries.
economic aspects
Large listed companies with high market capitalization usually have a larger trading volume. In addition to their higher market capitalization, this is also due to the media attention they receive. Small companies with a smaller market capitalization also have a lower trading volume on average; they can experience a market tightness. As a result, however, their price development can be more volatile , as lower sales can already cause significant price fluctuations. This represents a form of liquidity risk, both for buyers and sellers, because liquidity can be limited.
The trading volume also serves as an indicator in technical analysis, e.g. B. to determine or confirm trends. Furthermore, patterns of chart analysis can be rated as more meaningful if they are accompanied by high or low trading volumes.
The trading volume across all securities on a trading venue is an indicator of the market share of a stock exchange and is therefore comparable in interpretation to the turnover or assets under management of other companies.
Legal meaning
In the United States , the volume of trading in a security also has legal significance. Anyone who buys or sells a certain number of a security in proportion to the volume traded falls under Article 144 of the Securities Act of 1933 . The calculation of the trading volume is therefore carried out by the United States Securities and Exchange Commission (SEC).
Individual evidence
- ↑ Hans E. Büschgen, Das kleine Börsen-Lexikon , 2012, article Börsenumsatzanalyse
- ↑ Deutsche Börse Group from February 3, 2016, Deutsche Börse launches new XDAXDAX index , accessed on June 19, 2019
- ↑ Volker Tolkmitt, Neue Bankbetriebslehre , 2007, p. 74
- ↑ US Securities and Exchange Commission, January 16, 2013, Rule 144: Selling Restricted and Control Securities , accessed June 19, 2019
