This seventh in a series of nine NebGuides on technical analysis in marketing centers on daily volume and open interest. They help investors find clues to market movement and bolster the chances of enhancing their financial position. In the futures market, a new contract becomes a reality only when a new buyer and a new seller complete a transaction.
Volume is the total amount of purchases or sales transacted in a given day.
Each time a record of a new market position is established or reversed, the total volume increases or decreases by one. To find the volume, add the total of the short positions, or add the total of the long positions that particular day. Do not add the two together because a contract requires one of each. Each time a transaction is completed, whether it involves establishing a new position or offsetting an old position, the volume is increased by one. In general, trading volume has little relationship to a season, although a slight upward trend may occur during heavy crop movements.