Expert: Paul Henneman - 1/7/2004

Question
Hello:

If I'm not mistaken volume represents the total number of stocks that were sold and then bought during a day of trading, a sell and a buy of the same stock equals one trade transaction.

If volume is 1,113,769,130, then this is the total number of selling and buying of shares of stocks during the day of trading.
(Maybe a better definition for volume would be the total number of shares that exchanged hands or owenership during a single day of trading.)

My question is as follows: In the unlikely event that only one share of stock was sold then bought for a single day of trading, would volume be 1?  

I thank you for any helpful answer and explanation that you may provide.  

Answer
Thank you for your question!
Yes, I believe that you are correct in how you understand volume. If one share was sold and bought in a day, then the volume would be one. I agree that you could think of this in terms of a single 'transaction' equal to a volume of 1, your description of volume as the number of shares that exchanged hands or ownership is also applicable. But keep in mind that volume does not necessarily mean the number of shares exchanging hands in one day. Volume can refer to any time period (weekly, monthly, or other time periods), but is most commonly used as a daily term. Volume also applied to other markets than just the equities market.
I hope this helps! Please do not hesitate to follow up with me if I can be of any additional service,

Sincerely,
Paul Henneman
President
ValuEngine, Inc.
www.ValuEngine.com