The volume that is traded for any script is total quantity of stock shares which are traded for a particular scrip in the specific trading day.
It comprises of the total no. of shares which are transacted between the seller and the buyer during any transaction. When the shares are actively traded, the volume of trade is very high and once the shares are traded less actively, the volume of trade will be very low.
For instance, a trader A purchases about 500 shares of the SBI bank, the Trader- B purchases 1000 shares of the same bank and then Trader- C purchases 1500 shares of the SBI bank to the trader apart from the traders And B mentioned above, within a time period of just one hour. Then, the total volume of that stock to be traded within just one hour would be 3000 shares. In simple words, the volume traded is sum of the complete trades.
The volume of delivery is volume of stock which is delivered to actual buyer out of traded volume. It’s the real percentage of total trade volume which results in shares transfer from one account to the other.
Not each and every trade is meant for settlement. Sometimes, trade might be intraday in its nature, where traders exit the position within one day. The volume of delivery could be derived by simply excluding trades that are settled within just one day.
Suppose the trader a sells off 100 shares and the Trader B purchases these 100 shares and also sells them to the Trader C and the Trader C after purchasing these shares keeps those with himself as delivery.
Thus, in total, even though the volume traded is 200 shares (100 shares bought from Trader A to C, 100 shares done within Intraday). But, the quantity deliverable is just 100 shares and thus it’s known as Delivery of Volume.
How to thoroughly interpret the volume of delivery?
Bull- you may increase the percentage of deliverable with a high volume and an increase in price.
Bear- a decrease in the percentage of deliverables with a decline in price.
The volume of delivery in itself would not tell you much. It’s once you combine the parameter along with the pricing when the picture of the market becomes clearer to us. The volume of delivery is quite an effective tool in order to carry out through analysis of the stock especially for the long term investors.
Volume Delivery vs Volume Traded
An increase in the volume deliverable with the falling price of stocks indicates bearishness on stock on the particular day.
The trade volume on the counter on a given day consists of a prominent share of the intraday trades as well as deliverable trades.
The shares don’t move from a Demat Account to the other since these trades are squared off in a session. On the other hand, the shares move from an account to the other.