Investor Glossary-on-balance volumeInvestor Glossary-on-balance volumeInvestor Glossary-on-balance volumeInvestor Glossary-on-balance volumeInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

On-balance Volume

The HTML to link to this page
 

On-balance volume (OBV) is an indicator that calculates a running total of the trading volume of a market or individual security. If the price close today is higher than yesterday, the total trading volume is 'up volume'. If the price decreased, it is 'down volume'. You compute on-balance volume by adding 'up volume' to the previous day's on-balance volume and subtracting 'down volume' to find the current on-balance volume. The theory is that you can see money moving into or out of a security by tracking on-balance volume. The assumption is that changes in on-balance volume precede significant price changes and price trend. On-balance volume is a forecasting, not a trend-confirming indicator. On-balance volume does not consider the amount of price change, only the amount of volume of the price movement. If on-balance volume begins to rise while the stock price remains relatively flat, a technical analyst would view this as a sign of increasing demand and expect the stock price to rise.



Rate this on-balance volume definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: balance sheet, Zero Cost Collar, LIBOR, implied volatility, wholly-owned subsidiary, inflation, per diem, Key Rate Duration, open position, limit order, 144a, ex-dividend, covered put, EBITDA, option premium, retained earnings, annual return, quality assurance, diluted share, labor relations, ex-dividend date, 401a, average price per share, deferred revenue, 1035 exchange, risk management, in escrow, command economy, required rate of return, liquidity ratio, minority interest, cancelled check, current ratio, reverse mortgage, FTSE, 1031 exchange, real GDP, FICO score, stock split, irrevocable trust, margin rate, APR, VIX, phantom income, stock market close, deferred tax, dividends payable, debt service coverage, class C shares


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2015 Investor Glossary - All rights reserved - Terms of Use