- Volume statistics tell investors how much trading is happening
- Trading volume stats don%27t reveal names or who is buying and selling
- Big sellers are revealed in other filings made public at a later date
Q: Can investors see who is buying or selling stock each day?
A: Some active traders pay close attention to trading volume. Trading volume is a measure of the number of shares trading hands each day.
Some investors, who use so-called technical analysis, see trading volume as a sign of conviction about a stock's future direction. If a stock rises sharply on heavy trading volume, technical analysts might take that as evidence there's quite a bit of bullishness in the trade.
Conversely, if a stock jumps on light trading volume, technical analysts might think that the move higher was fleeting and unlikely to continue.
Investors, though, must remember that trading volume is a measure of the number of shares trading hands. Volume is a total tally of trades and investors, including the buys and sells. By definition, every trade requires a buyer and a seller.
Traders also know volume is an aggregate count, so investors don't see the names of the buyers or sellers in each trade. There are required regulatory filings available to the public at a much later date that give that level of detail for some large market players.
There's another complication. The options market allows investors to make bullish or bearish bets on a stock -- without actually buying or selling the shares. If there are investors piling into a large number of puts, which allow the investor to sell the shares below the current price, that's a bearish trade.
That's why it's often more useful to look at options trades to see whether investors are bullish or bearish.
