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Why unusual volume?
Started: by latareadrummer Views / Replies:247 / 3
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Why unusual volume?

  #1 (permalink)
Trading Apprentice
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Why unusual volume?

Hi All,

Regarding unusual volume, sometimes I see volume spikes and subsequent price fluctuations but I can't always find the reasoning behind this. I understand earnings and news can cause these spikes but I'm either not finding the correct news sites or there are other reasons.

Is it just random?

Is it HFT or institutions making huge purchases?

$TOPS is the stock I saw today is spiking in volume but I see no news and no earnings releases.

Any point to a thread on this subject(I couldn't find through search) or some insight would be greatly appreciated.

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  #2 (permalink)
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  #3 (permalink)
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Hi,

I can not answer your question in general, but if you look at the TOPS stock on 07/20 then you can see that 1.2 Mio stocks changed hands. This is not really a lot. If I look at the previous volume then I think that one can see that the stock is totally illiquide.
If you look at 1 minute intraday bars on 07/20 then you can see that trading 95,000 stocks in 4 minutes was enough to make the stock go higher by nearly 40 % or 0,5$ per share. I suppose that this move up attracted other people who started to trade the stock.
So the volume may be unusually high, but it is not big. Maybe a trading guru recommended to buy these stocks. Some of these gurus recommend buys afther they bought by themself, expecting higher prices.
The further increasing volume on 07/22-25 may be caused by the original move up by nearly 40%. This attracts people.

You should not generalize things, but you should maybe keep in mind that it is easy to cause big moves in such kind of stocks..





latareadrummer View Post
Hi All,

Regarding unusual volume, sometimes I see volume spikes and subsequent price fluctuations but I can't always find the reasoning behind this. I understand earnings and news can cause these spikes but I'm either not finding the correct news sites or there are other reasons.

Is it just random?

Is it HFT or institutions making huge purchases?

$TOPS is the stock I saw today is spiking in volume but I see no news and no earnings releases.

Any point to a thread on this subject(I couldn't find through search) or some insight would be greatly appreciated.


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  #4 (permalink)
Trading Apprentice
NYC, NY, USA
 
Futures Experience: Intermediate
Platform: NinjaTrader
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Favorite Futures: Indices, Energy
 
Posts: 12 since Jul 2015
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Volume is just volume

Volume used as a stand alone indication is not wise.

I have watched trend continue to trend continuation with and without large volume.

What is important, is understanding the instrument and the traders who have money that manipulate it.

The markets are not as random as what traders and schools who market information pass on.

Know your market, know yourself in why you place trades...develop insight over time.

Don't rush into trading.

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