Volume Trading

Volume refers to the number of Stocks or other Securities, that have been bought or sold in a specific time period. This could be average volume by individual trade, daily volume or average daily volume.

Trading Volume is very closely monitored for individual Stocks or Derivative Contracts, Futures and Options. The level of trading volume can indicate the level of investor interest and sentiment towards a Stock. Volume in stock trading cannot be used in isolation. High Trading Volume could be indicating completely different trends for different Stocks. The dynamics of the Stock Price, compared to Graphs such as the Moving Averages or the MACD will assist. The volume traded is one data point to be taken into consideration or one part of the analysis in constructing a view and an investment strategy towards a Stock.

The term “Yield” covers a wide range of investments, from Shares so Dividend Yield or Earnings Yield, Fixed Income securities, so Bond Yields, or a rental yield on Real Estate. A yield could be either, a fixed predetermined rate or fluctuating, as is the case with a Dividend per Share. The Yield is calculated as a percent based on the investment, for Bonds at issuance the Par Value, for Stocks. This is the current Stock Price. Yields are referred to as an annual yield or an annualised yield when calculated over several years. A Bond purchased in the Primary Market, the annual Yield, is calculated on the Par Value even if the coupon payments are semi-annual. If a Bond is traded in the Secondary Market, the quoted Yield will be either higher or lower depending if the Bond is trading at a Premium or Discount to the Par Value, Face Value.