What Are Volume Stocks?

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The volume of stocks is the amount of selling and buying in a particular stock that is taking place on a regular basis. Find out about stock volume by looking at the average daily trading numbers in the newspaper or on Web sites with help from a financial adviser in this free video on the stock market.

Part of the Video Series: Investments & Money Management Tips
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Video Transcript

Does volume matter? Hi, this is Roger Groh with Groh Asset Management. The question today is, does the amount of selling and buying in a stock on a regular basis, on average matter? Yes it does! If there's not quite a bit of trading going on, if you have one large buyer or seller, than you can have big market moves just based upon what that one trader does. Is that healthy? Well, it depends on what side of the market that you're on. How can you get that statistic? Well, if you look in the newspaper in the quotes, or you go on to most websites, it'll show you the average daily trading volume. You might also look back at some of the historical notes to see what the average trading volume is. And than think about the number of shares that you own, in relation to the average volume. And think if I had to sell them today, or better yet in the worst case, is there going to be enough volume for me to get out? It may not be the best price, but is there going to be volume enough for me to get out? Remember, especially in small cap, frequently there isn't any volume, and there isn't any way out. So I hope that helps. Volume does matter. I'm Roger Groh, at Groh Asset. Thank you very much for spending time with me.

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