Why is the stock trading volume highest in the first and last 15 minutes?

by David Jenyns on March 18, 2012

Question by Curious: Why is the stock trading volume highest in the first and last 15 minutes?
The stock trading volume seems to shoot up several times especially during the last few minutes of the day. Why is this?

Best answer:

Answer by Whitey
People have had overnight to review stocks so for good deals, they usually want to get in early. In the last 15 minutes, sometimes people want rid of stocks before they go home, so put them lower and the bargain seekers take them.

Know better? Leave your own answer in the comments!

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Al March 18, 2012 at 11:40 am

1st thing people have had a chance to see what other world markets are doing and can see where they can get a bargin, those who trade want to get in before the market moves too much. Then last thing the traders want to take their profit, or simply they may not want to risk overnight developments causing their stock to open at a different level…..I do this myself as I can sleep easier that way, tomorrow is a new day and there will be something else to make money on 🙂

Binh Truong March 18, 2012 at 12:07 pm

Adding to what others have answered as well, a lot people put in orders to buy or sell that are to be executed right in the morning, so you have increased volume due to that. You also have many active day traders (myself a former one of those) who take advantage of this, and create a lot of the opening volume. Volume dies down during the day for several reasons, as most people are working, and those who trade are not as active in the middle of the day, simply because the volume is lower. The end of the day marks the return of most day traders, and for those traders that only hold positions in stocks for the duration of the day, they will go flat (buy or sell whatever orders they’re holding so they’re empty) adding to the increased volume. I hope this helps.

mrzwink March 18, 2012 at 12:12 pm

day traders open positions at the start of the day then close them just before closing time. this gives them the opportunity to invest overnight on the Japanese and European Stock exhanges, or get more interest because the cash is in the account over night.

this is only useful when dealing with extremely large funds. otherwise the transaction costs would not weigh up to the gains.

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