Define: Volume

UK Accounting Glossary

Definition: Volume



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Full Definition of Volume


Volume is a measure of trading activity. On stock exchanges, volume is the number of shares trading hands over a given period of time. Not all exchanges count volume in the same manner; on the NYSE, a transaction of 100 shares adds 100 to the volume tally, but on the Nasdaq, the same transaction increases the volume by 200. The Nasdaq method is referred to as double-counting because the buy and sell are viewed as distinct transactions. As a general rule, markets that are completely electronic double-count, whereas physical markets do not.

Market timers often use volume as an indicator of future price change. For instance, some traders believe that a surge in trading volume on a stock is a precursor to a rapid change in price. The theory is that important news does not reach everyone at the same time, so an unexpected increase in volume suggests important news has been leaked.


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Definition Sources


Definitions for Volume are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 5th February 2020.