Trading volume refers to the total number of shares or contracts that are bought and sold in a financial market over a specified period of time, such as a day, week, or month. It is a key measure of market activity, liquidity, and investor interest in a particular security or market. High trading volume generally indicates strong interest in a security or market, while low trading volume may suggest limited interest or lack of liquidity.
Trading volume is often used by investors and analysts to assess the strength of price movements and identify trading opportunities. For example, a stock with high trading volume and a significant price increase might signal strong buying interest, whereas a stock with low trading volume and a significant price increase might be less reliable or more susceptible to price manipulation.
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