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Finance GlossaryAverage Daily Trading Volume
Average Daily Trading Volume
Definition of Average Daily Trading Volume
The Average Daily Trading Volume (ADTV) is a technical indicator that indicates the number of shares that were bought and sold on average across one or more trading days.
A high ADTV means that more investors are interested in a stock while a low ADTV implies that a stock isn’t on the radar of many investors. The formula for Average Daily Trading Volume (ADTV) is:
ADTV x days = Total trading volume of stock across x days / x days
A high ADTV means that more investors are interested in a stock while a low ADTV implies that a stock isn’t on the radar of many investors. The formula for Average Daily Trading Volume (ADTV) is:
ADTV x days = Total trading volume of stock across x days / x days
Related Terms
At The Money
At The Money is a scenario in which the strike price of an options contract is the same as the market price of its underlying security.
Exercising an option At The Money can lead to a loss as the premium paid for the contract won’t be recovered.
That said, At The Money is known to be a positive indicator as it indicates the option may soon have intrinsic value.
Exercising an option At The Money can lead to a loss as the premium paid for the contract won’t be recovered.
That said, At The Money is known to be a positive indicator as it indicates the option may soon have intrinsic value.
Basing
Basing happens when a security trades sideways after prolonged periods of falling prices.
As a result, the security forms a “base” or flat pattern which means there is little to no upward or downward movement and a decline in volatility.
This may go on for a relatively long time but is crucial as basing is an indicator of any meaningful reversal that may happen.
As a result, the security forms a “base” or flat pattern which means there is little to no upward or downward movement and a decline in volatility.
This may go on for a relatively long time but is crucial as basing is an indicator of any meaningful reversal that may happen.
Support Level
The support level refers to a specific price point where traders or investors consistently find buying interest in a stock or asset. This prevents the price from falling further. It works like a base that holds the price up. However, if the price breaks the support and drops below this level, it may indicate weakness in the stock. On the other hand, bouncing off the support level points to a potential buying opportunity.
Treasury Stock
Treasury stock refers to shares that a company has repurchased from the open market and holds in its own treasury. These shares do not pay dividends and typically have no voting rights. Companies repurchase shares to improve earnings per share, optimise capital structure, or support stock price stability.
Debt To Equity Ratio
The debt to equity ratio is a measure of a company’s financial health that’s calculated by dividing liabilities from shareholder equity.
Debt to equity ratio: Total liabilities / Shareholder equity
A high debt to equity ratio means that a company is taking on more debt to run its business. A low debt to equity ratio means that a company is operating at low debt.
That’s why investors calculate the D/E ratio to understand a company’s ability to operate without debt. Generally, D/E is used for comparative analysis within sectors, not across industries because the ideal debt ratio may vary.
Debt to equity ratio: Total liabilities / Shareholder equity
A high debt to equity ratio means that a company is taking on more debt to run its business. A low debt to equity ratio means that a company is operating at low debt.
That’s why investors calculate the D/E ratio to understand a company’s ability to operate without debt. Generally, D/E is used for comparative analysis within sectors, not across industries because the ideal debt ratio may vary.
Paper Profit/Loss
Paper profit or loss ( Unrealised profit or loss) is the profit or loss on an investment that has not been converted into actual cash. Paper profit occurs when the current market value of a security is higher than its purchase price while when the current market value of a security is less than its purchase price, it is paper loss. The profit or loss is only realised when the investor sells the security, thus it is also called paper trading and virtual trading. Indian tax laws don't tax profits on paper until realised through sale.
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