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


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use