What is Average Daily Volume?

Free Stock tipsThe Average Daily Volume, in short ADV, is the number of shares of a security which is being traded every day averaged over a specific period.  A trader may weigh up the current trading volume with the average daily volume to find out whether the volume is particularly high or low. This valuation will be helpful in the technical analysis. The number of stocks traded each day during a period of time is normally one year.  The Average Daily Volume serves as a basis to decide if trading in security is unusually heavy.

The average daily volume is calculated over the track of the previous year. When the Average Daily Volume is high, the stock can easily be traded since it can have an effect on the price of security. If trading volume is not too high, the security is expected to be less expensive, as people are not willing to buy it.

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