Stock Price and Trading Volume - Essay Example

Only on StudentShare

Extract of sample
Stock Price and Trading Volume

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 ...Show more


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).
Author : johnpaul93
Save Your Time for More Important Things
Let us write a custom essay on your topic
"Stock Price and Trading Volume"
with a personal 20% discount.
Find out more

Related Essays

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
Community Health
The concept of an aggregate in terms of people is defined as a group of people who gather together and share a common interest. Examples of an aggregate may be a group of elderly people who meet together to interact but don't necessarily live together. A church group would also be an example of an aggregate (Clark, 2002).
2 pages (500 words) Essay
Maximising Stock Valuation
While the proportion of debt, preference shares and ordinary shares used by the company represents the capital structure, the amount of debt the company uses is denoted by the leverage. A firm with lot of debt is said to have a high capital gearing ratio that increases the cost of capital for the firm by way of interest provisions.
7 pages (1750 words) Essay
The effect of dividends on stock price
Quite often, in fact usually, they end up making more money than most speculators and gamblers. Skilful investment decisions alone cannot make you an instant millionaire or enormously rich overnight. For that you need to be a speculator or a gambler with an inborn flair and instinctive feel for the market, combined with a willingness to take great risks.
37 pages (9250 words) Coursework
Stock Price and Information
So the company should reveal its original financial position. If managers have superior information about the market value of the firm, they may know when the firm is overvalued. If they do, they might attempt to issue new shares of stock when the market value exceeds the correct value.
20 pages (5000 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
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
Discussion for online HRM Healthcare class
incentives and human resource management tool suggests that the motivation level within workers of health care system needs to be enhanced (Mathauer, 2006). They need to be provided with a proper mixture of financial and non-financial benefits. In this study, interviews were
1 pages (250 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email