Dollar volume is the total value of a given security or stock exchange, traded during a given period of time.
Dollar volume is the total amount, expressed in US dollars (USD), of a given security or stock exchange, traded during a given period of time. It is often reported over the course of a business day to indicate whether stocks traded lightly or heavily during the trading day. The number can be an indicator of how confident investors are in their choices.
The New York Stock Exchange has an average dollar volume of around $55 billion worth of shares traded per day.
The New York Stock Exchange, for example, has an average dollar volume of $55 billion worth of shares traded per day. Actual volume can fluctuate greatly from day to day depending on market conditions. One day it could be closer to $100 billion dollars, while the next day it could be closer to $35 billion dollars.
There are several things that can affect dollar volume. Great uncertainty in the market can mean that many investors prefer to hold their shares rather than trade. This can happen in bear or bull markets. Certain international holidays may slow down international trade by a few days. Although equity markets are located all over the world, most are closed on national holidays in their home countries, as are most investment firms and brokerage firms. Trade can be lighter when these international companies take the day off.
A large volume of dollars does not necessarily indicate good economic health. In times of great economic turmoil, people may be willing to sell their shares, even at a loss, to get rid of them before they lose even more value. So the number should be just one of the things an investor looks at when trying to form a picture of a security’s or market’s value.
The dollar volume must be considered along with the question of how the stock market fared on that particular day. A large volume, coupled with a substantial rise in the market, is a good sign that investors are satisfied with the way things are going. A light volume and a substantial increase could indicate that some investors are worried or confused, or that an industry has had a really good day. Likewise, if the market goes down and trading volume is low, this could be a sign of hope for some as they point out that many investors are unwilling to sell.