What's the difference between traffic and circulation in stock market analysis?

In stock market analysis, "traffic" and "circulation" are terms used to describe the activity of shares trading hands, but they have distinct meanings: 1. *Traffic*: Refers to the total number of shares traded within a given period, usually measured in terms of volume (e.g., number of shares, dollars, or contracts). It indicates the overall activity level in a stock, with higher traffic suggesting more buying and selling. 2. *Circulation*: Refers to the number of shares changing hands among different investors, excluding shares traded between the same buyer and seller (e.g., wash trades). Circulation measures the actual transfer of ownership, providing insight into the stock's liquidity and market participation. Key differences: - Traffic includes all trades, while circulation excludes wash trades and focuses on genuine ownership transfers. - Traffic measures activity, while circulation measures liquidity and market engagement. Understanding both traffic and circulation helps analysts assess market sentiment, liquidity, and potential price movements. read less

In stock market analysis, **traffic** and **circulation** are terms that can be associated with trading activity but have different connotations. 1. **Traffic**: - Refers to the volume of activity or the number of transactions happening within a specific stock or across the entire market. It often indicates the **amount of trading**, whether buying or selling, in a given time frame. - In technical terms, traffic can be seen in **trading volume** charts, which measure the number of shares traded on a specific day. Higher traffic typically suggests strong market interest and liquidity in that stock. - For example, during major news events or earnings reports, traffic in certain stocks tends to spike due to increased buying or selling. 2. **Circulation**: - Typically refers to the total number of **outstanding shares** available for trading in the stock market. This is also known as the stock’s **float**—the number of shares held by the public, not restricted or held by insiders. - A stock with **high circulation** (many shares available for trading) generally experiences less price volatility, as it takes more volume to significantly impact its price. - Conversely, stocks with **low circulation** or a smaller float may see more significant price swings due to less liquidity. In summary, **traffic** is about trading activity (how often a stock is traded), while **circulation** focuses on the availability of shares (how many shares are circulating in the market). Both are critical to understanding stock liquidity and volatility. read less