High volume, no movement..why?

[cashmoney69]

Intel can do 80 million avg volume a day easy..but its stuck in the mud, on the other hand google has an average volume of 6 million but can move a point or more no problem.

why is that?...more volume should = more volatility.

-nathan

 

[rcj]

Probably several reasons including the sh price difference.

For last Friday....
Calculating percentages comparing price chg to open price for each stk ...... Goog = 0.36% change and Intc = 1.66%.
So actually, percentage wise, Intc fluctuated more than 4 times Goog! For Goog to get the 1.66% chng for Intc, it would have needed approx a 7$ chng at the close.

The days range for Goog was 7$ and 0.38$ for Intc.

At the open, buying 100sh of Goog @415.91 would have resulted
in a gross profit of 342$. shorting 1140shs Intc at the open @19.30 would have given 342$. Funds commitment would have been 41591$ and 22002$ respectively.

...rj

Msft and Lu come to mind. High volumn but may go thru periods
in tight ranges.

 

[goodfellow]

Quote from cashmoney69:

Intel can do 80 million avg volume a day easy..but its stuck in the mud, on the other hand google has an average volume of 6 million but can move a point or more no problem.

why is that?...more volume should = more volatility.

-nathan

Google has less shares out because it never split. A stock with less shares out will move more with lower volume or the same volume than a stock with more shares out. Intel has split many times which has oversaturated the stock with shares and therefore it does not move as much. Too many shares out to make the stock move.

This is one reason why Google does not want to split, because if they split then it will not move when people buy and sell. It will be like Msft and intel and trade millions and millions of shares a day and not move. Splitting a stock isn't always good.

 

[PitchBlack]

Quote from cashmoney69:

Intel can do 80 million avg volume a day easy..but its stuck in the mud, on the other hand google has an average volume of 6 million but can move a point or more no problem.

why is that?...more volume should = more volatility.

-nathan

I think it has nothing to do with volume.
Price movement is a result of the unbalance between buyers and sellers. If there are more potential buyers than sellers, the buyers will have to pay a premium to get filled. Those who pay the highest price will be filled easier than those who want to buy cheap.
If there is a balance between buyers and sellers you can trade huge volumes without moving the prices.

Probably the unbalance in Google is bigger than in Intel.

 

[Mr B]

less liquidity + more volume = more volatility.

presumably one of them has good liquidity and the other does not. more liquidity = tighter spreads.

 

[Albrady]

INTL: this company is currently moving in flat zone as an indication of a waiting for such news. The current movement is bullish since INTL is in distribution phase.


Please see my write-up through the link below:

http://www.elitetrader.com/vb/showthread.php?s=&postid=1119595#post1119595

 

[Albrady]

Sorry may be you meant INTC not INTL if so please see the analysis again for both companies under same link...



Sorry about the confusion

 

[cashmoney69]

Quote from goodfellow:

Google has less shares out because it never split. A stock with less shares out will move more with lower volume or the same volume than a stock with more shares out. Intel has split many times which has oversaturated the stock with shares and therefore it does not move as much. Too many shares out to make the stock move.

This is one reason why Google does not want to split, because if they split then it will not move when people buy and sell. It will be like Msft and intel and trade millions and millions of shares a day and not move. Splitting a stock isn't always good.

Why wouldn't intel buy back its shares if its over saturated?..

Also, once a stock is split, is there no way to un-split them?

- nathan

 

[Pabst]

There's ZERO correlation between volume and volatility. Period.

 

[Bitstream]

Quote from Pabst:

There's ZERO correlation between volume and volatility. Period.

although rufus is perfectly right in what he said, i have to disagree on this one for what concerns the mkt as a whole...usually volumes drive vola, it is clear if u analyze the days the bb trade more than 2bln shares compared to those when just 1.2bln exchange hands...on stocks we should be maybe better off differentiatin' between the usual daily volumes in a particular stock and explosion of volumes durin' days followin' news announcements/report, etc.] in the latter environment it is pretty clear that the sheer amount of volume cause volatility to increase dramatically.