Financial Glossary Header Image

Average Daily Volume

Updated on March 20, 2023

Average Daily Volume is also known as Average Traded Volume or Average Volume. It is the average number of shares bought and sold daily, over a period of time. This key technical indicator is frequently used by traders.

Why is Average Daily Volume used?

Average daily volume is used because:
a) It tells the overall count of shares or securities traded during a trading day, that is buying and selling or changing hands of shares on a daily basis
b) It indicates liquidity levels and participation of traders in a particular stock/security.
c) It provides traders with a good idea about the entry and exit levels of a stock