We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Stock Price and Trading Volume - Essay Example

Comments (0)
The Volume and Price Change Per Se and the empirical evidence found. There are the bull markets and the bear markets, the volume is found to be relatively heavy within the bull markets and to be lighter within the bear markets. First bond market (20) tests had been developed by Epps as to sustain the above mentioned theory and then later tests were developed upon stock markets (22).
Download full paper

Extract of sample
Stock Price and Trading Volume

Download file to see previous pages... Wood, McInish, and Ord (71), had found contradicting evidence, in the price-volume relationship. For they established the ratio between the price change and trading volume to be greater for the share prices downticks.
Smirlock and Starks (64) had found that the relationship could only be supported during the time intervals when they could distinguish when the new information ex ante had reached the financial market. Due to the lack of the delivery of information to the financial market and the upbeat transaction costs, small amounts of evidence found that the relation had been lower for the up-ticks in the price than for the downticks.
Data collected over an hourly basis from an extensive market index by Jain and Joh (38), had discovered the trading volume relates positively to the enormity of the price change. Findings have shown though, that the volume is more sensitive towards the positive price changes in contrast to the
negative price changes. Epps, Hanna, Jain, Joh and parts of Smirlock and Starke's findings shown an implication of a positive correlation between the price change and trading volume per se. Ying's items (1) and (2) and a numerous number of researchers had found a similar positive correlation as found above.
Rogalski (60) had...
tedly found a positive correlation as well as Richardson, Sefcik, Thompson (58), Comiskey, Walkling and Weeks (12) all had found through tests on annual volumes of turnover and the price change to have positive traverse correlations. No such correlation had been found however by James and Edmister (39).
So by looking at the empirical evidence summarized in Table 2, the two features discussed are, all the findings are from data collected from stock and bond markets, unlike previously mentioned empirical correlations between the price change and trading volume, and the data collected has not been collected from any futures markets. The statistical results found are weak, certain correlations found by Rogalski were found to be low for example and there were a couple findings that were inconsistent with a positive relationship to be found.
Theoretical explanations by several authors of their findings, say the association of volume

with the methodical risk through to stock returns, suggested by Morgan (51). A positive correlation between the price change and trading volume had been implied by the 'mixture of distributions hypothesis', only if the conditional indication of the stock price procession is in proportion to the quantity of new information into the market. There is however an unclear sense as to how the above could actually work. For the MDH with indicating minority is inconsistent with the markets equal balance, since it implies that the price change expected is from the arrival of new positive information into the market.
Epps (20) found that a positive price change is cause for a larger volume on share transactions than for the negative price changes. His assumption that the 'bull' investors are optimists about their asset value at the close of the ...Download file to see next pagesRead More
Comments (0)
Click to create a comment
Stock trading experience
This activity helps in gaining huge experience about the market fluctuations and also keeps the instinct on the line. Stock Trading Experience Just few weeks ago, I decided to enter into the stock market and become the professional trader.
3 Pages(750 words)Essay
Share Trading Assignment
There is no doubt that trading in shares of 888 Holdings and Vodafone public companies will yield a percentage profit that beats the FTSE All-share index. Other than conducting an analysis on the trading, this paper provides a critical diary on the trading as well as the significance of the concepts learnt in this course.
8 Pages(2000 words)Essay
Australian Stock Exchange
According to Furgang (2010), stock is a partial ownership of the company also known as share. The stocks need to be traded to investors in order for the company to obtain the funds it requires in its business undertakings. Moreover, the initial investors need to trade their stocks to other interested investors.
7 Pages(1750 words)Essay
Trading & Dealing in Security Markets
The main topic of this paper is High Frequency Trading – HFT. This paper examines the pros and cons of HFT and makes recommendations on how regulators can address the concerns that market practitioners have over HFT. The author also describes wanted and unwanted effects of High Frequency Trading.
4 Pages(1000 words)Essay
Proposal of analyzing Hershey's stock price and this firm
The company’s Dividend discount model analysis also confirms this by it indicating that the company’s stock’s current price is undervalued. This means that an investment made now is likely to generate high returns when viewed in terms of the stock’s future value.
8 Pages(2000 words)Essay
Malaysian stock market
As what the theory of efficient capital markets theory predicts, this study hypothesizes that if the companies' response contain new and unexpected information, stock prices and trading volume of the stocks in question will respond either by rising or falling, the change at its highest when the information is just released.
12 Pages(3000 words)Essay
Understanding Stock Options Information
Technical analysis is the study of specific securities and the overall market based on supply/demand relationships. Charts and Graphs are the technician’s tools. They interpolate data and decide using graph trends and 50 and 200-day moving average charts. To understand patterns one must observe carefully the breadth and movement of the market.
9 Pages(2250 words)Essay
Stock split and stock price
This means that in a split, investors may even gain. Hence, when dividends are declared shareholder's equity decreases as a result of the decrease in retained earnings while liabilities increase as a result of the increase in dividends payable. Upon payment of the dividends, cash decreases while liabilities also decrease.
2 Pages(500 words)Essay
Casa study of Computer Driven Trading
This paper presents a detailed analysis of different aspects of computer driven trading. This research is aimed to analyze and discover the in-depth factors regarding the effectiveness or shortcomings of computer
5 Pages(1250 words)Essay
Stock trading
The better of all the available stock trading strategy for newbie’s is discussed. Hedging is a better stock trading strategies when the investors’ aim is capital protection. Hedging is a method by which an investment can
2 Pages(500 words)Essay
Let us find you another Essay on topic Stock Price and Trading Volume for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us