What is trading volume?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 3 min
In short
Trading volume is the amount traded over a period. It gauges activity, and higher volume generally means it is easier to get filled. But the methodology and coverage differ by venue, and inflated figures have been documented on some exchanges.
Key points
- The amount traded over a given period
- Higher volume generally means easier execution
- Coverage and method differ between venues
- Inflated figures have been reported in the past
Definition
The total quantity executed over a period, or its value equivalent — the basic measure of how actively an asset is traded.
The count is simply the total executed over the period: ten trades of 1 BTC make 10 BTC of volume, and repeated trading by the same person still counts each fill. That makes it a fundamentally different measure from open interest, which counts positions still outstanding.
Assets and hours with high volume tend to attract more resting orders, which narrows spreads and makes it easier to fill larger sizes near the expected price. In low-volume markets, even modest orders can move the price noticeably.
Reported volume, however, cannot always be taken at face value. Research firms have documented cases of exchanges presenting figures well above actual activity. When comparing venues, check what is included — spot only, or derivatives too — and where the numbers come from.
Watch out for
- · Reported volume is compiled differently by each venue and cannot be compared naively
- · Figures well above actual activity have been documented in the past
- · High or low volume tells you nothing about future prices