What Does Stock Volume Mean?

The NYSE measures stock volume differently than the NASDAQ.

Stock volume is a term investors use to describe trading activity on stock exchanges. Not all stock exchanges measure volume in the same way.

Trading Activity

Trading activity on stock exchanges is the number of securities investors buy, sell and trade in a day. Physical exchanges count the exchange of one stock as a single exchange. Electronic exchanges count the exchange of the same stock as two separate exchanges, a purchase and a sale.

Physical Exchanges

The stock volume for exchanges with physical locations, such as the New York Stock Exchange and the Chicago Mercantile Exchange, is the number of securities traded in that day. If trading increased by 200 shares, then the stock volume is up by 200.

Electronic Exchanges

Electronic exchanges with no physical location double count stock volume because they count buy and sell transactions for the same stock as separate. If trading increases by 200 shares, then stock volume is up by 400. The NASDAQ and Over-The-Counter (OTC) markets are examples of electronic exchanges.

References

• Investor Glossary: Volume
• The Financial Dictionary: Volume