What Is Trading Volume?
In short
Trading volume is the number of shares, contracts or units that change hands in a given period; it measures how much trading took place and says nothing about the direction of the price.
Volume counts the quantity traded during a bar, a session or any other period. For a stock it is the number of shares that changed hands, for a futures contract the number of contracts and for a crypto asset the number of units. Each trade has a buyer and a seller, so a trade is counted once and not twice.
Volume is usually drawn as bars under the price chart. High volume means that many orders were matched and low volume that few were. Research has documented that volume is positively related to the size of price changes, which is why chartists read a large move on thin volume and the same move on heavy volume differently. Volume does not reveal whether buyers or sellers were more eager, because every unit traded has both.
Comparisons need care. Volume depends on where an instrument trades, so figures from different venues, or from a venue that reports only part of the market, are not interchangeable; for crypto and tokenized assets the reported volume can come from a single venue. Volume in units is also not a value: a share of a high-priced stock and a share of a low-priced stock are different amounts of money.
How Lzzo.com shows it
The interactive chart on a product page draws a volume histogram under the price where the data carries a meaningful traded volume. It is left out for exchange rates, indices, yields and calculated model series such as gram gold, which have no single traded quantity, and it appears only when at least one bar of the series reports a positive volume.
Related guides
Sources
- J. M. Karpoff, The Relation between Price Changes and Trading Volume: A Survey, Journal of Financial and Quantitative Analysis, 1987
- John J. Murphy, Technical Analysis of the Financial Markets (New York Institute of Finance, 1999)
Primary and official sources, named as plain text.