Psychology: Active Shares

2021년 3월 21일

Price moved up either by volume (Number of trades/ News/ Buy call) or itself (Operator/ Profitability/ Future).
Every companies issued fixed number of shares. But have you figured about...
How many shares are being trades actively per day? How many shares are holding tight by shareholders for long term?


THEORY
This could be used to estimate from the percentage of number of trades per day over total number of shares company issued.
If percentage is high indicates shares are actively traded and vice versa. So we can know how many percentage of shares are hold by shareholders and not being traded.*

But Why? Why they do not trade?
1. Is it because of mass number of shares are holding by director/ institutes or
2. Most of the individual shareholders expect very high in increasing of shares price in coming future and want to hold it tight or
3. Individual shareholders are stuck in the highest price which they not willing to cut loss making number shares are paused in trades.


INTERPRETATION
High percentage of this indicator tells:
1. High active shares
2. Many people trades

Low percentage of this indicator tells:
1. Low active shares
2. More people holding the shares instead of trades


IN CONDITION:
When price is increasing, indicator shows high percentage, which mean shares are actively trades, traders can effectively moving up the price as photo below. === "GOOD TO TRADE"



When price is increasing, indicator shows low percentage, which mean operator is moving up the price with low active shares as photo below. === "GOOD TO TRADE" and "GOOD TO INVEST" if stock price is undervalue



If price do not increase, even in high percentage, which mean operator is holding the price from moving up.
If price do not increase, and percentage is low, of course stock price is not going to move.

If price decreases, percentage is high, something may wrong with profitability/ future of company. Operator is holding from moving up but lower down the price.
If price decreases, percentage is low, the same, something may wrong with profitability/ future of company. The operator moving down the price.



*it does not account for retailer trades many time per day which may double / triple up the volume making data slightly bias.

Just For Sharing ^^