Turnover Vs Volume?

man4urheart

Well-known member
#1
What is difference between Turnover vs Volume. I.e. NIFTY Index.

Date Open High Low Close Shares Traded Turnover ( Cr)
25-Apr-2013 5856.10 5924.60 5853.30 5916.30 199597725 9211.66
26-Apr-2013 5899.75 5907.05 5860.50 5871.45 141311877 6840.01
 
#2
What is difference between Turnover vs Volume. I.e. NIFTY Index.

Date Open High Low Close Shares Traded Turnover ( Cr)
25-Apr-2013 5856.10 5924.60 5853.30 5916.30 199597725 9211.66
26-Apr-2013 5899.75 5907.05 5860.50 5871.45 141311877 6840.01

In options, Turnover has to do with the notional value of the contracts traded in rupees.

Volume here refers to the number of the contracts traded.

Usually volume is an indicator of liquidity of the contract and turnover indicates the depth of the market. Nevertheless, that is usually a redundant distinction.
 

Alchemist

Administrator
Staff member
#3
What is difference between Turnover vs Volume. I.e. NIFTY Index.

Date Open High Low Close Shares Traded Turnover ( Cr)
25-Apr-2013 5856.10 5924.60 5853.30 5916.30 199597725 9211.66
26-Apr-2013 5899.75 5907.05 5860.50 5871.45 141311877 6840.01
For Nifty, volume is the total number of shares (of 50 underlying stocks) traded in the cash market.

Turnover is the total value of shares traded in the cash market.

You can see the details here:

NSE - National Stock Exchange of India Ltd.

For Nifty futures, turnover and volume have a different meaning and those have nothing to do with cash market turnover and volume.
 

Alchemist

Administrator
Staff member
#5
Volume is clear. What signal turnover generates in trading?

Basically volume is more important or turnover?
As far as Nifty is concerned, I give more weight to turnover than volume.

Volume isn't a good indicator for Nifty because the same volume in different stocks has different implications for the respective stocks as well as the index.

If a large buyer buys 1 crore shares of J.P. Associates, the stock will rise by 10%-15%, but the Nifty will hardly move.

If the same quantity of Infosys is purchased, Nifty will rise sharply and the stock will just explode.
 

man4urheart

Well-known member
#6
Does turnover also include FII Buying and Selling?

I am still not very clear how turnover has more importance over volume?

As you said: Turnover is value of all the shares in cash market.

In that case value will increase with increase in Price of shares.

It is more a function of price instead of number of shares buy sell.

In your example; Volume for one particular share doesn't matter. I really look for Nifty volume such as does it increased today as compared to yesterday and was today "day candle " up or down!
 

Alchemist

Administrator
Staff member
#7
In that case value will increase with increase in Price of shares.
Yes, that's true, but the inconsistency due to price variation is much less compared to inconsistency due to lumping of volumes of different stocks.

Let me give an example.

Suppose there is a jeweler who deals in ornaments of gold and silver.

On one particular day, he sells gold jewellery weighing 200 grams and silver jewellery weighing 500 grams.

Next day, he sells gold jewellery weighing 300 grams and silver jewellery weighing 200 grams.

Note: the prices of gold and silver were different on both days.

Which day was better for him - the day he sold 700 grams of jewellery or the day he sold 500 grams of jewellery?

Obviously, the second day.

On the first day, his volume (in grams) was higher but majority of volume came from low priced ornaments and thus the day was less profitable for him.

Just like 10 grams of silver is very different from 10 grams of gold, 1 crore shares volume of J.P. Associates is very different from a 1 crore shares volume of Infosys.

Any analysis done by lumping all volume data together has very limited use.
 
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