Active Stocks - Explained
What are Active Stocks?
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Table of ContentsWhat are Active Stocks?How Do Active Stocks Work?Most Active Stocks Academic Research on Active Stocks
What are Active Stocks?
Active stocks refer to stocks which are heavily-traded on an exchange. They are actively purchased and sold, and frequently have outstanding shares in large numbers. Because active stocks are heavily-traded, they often have bid-ask spreads that are low because of their increased liquidity.
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How Do Active Stocks Work?
Active stocks are securities that are heavily-traded on an exchange, and often have outstanding shares in large numbers. Because active stocks are heavily-traded and are always available in huge volumes, they often have bid-ask spreads that are low because of their increased liquidity. Active stocks are likely to trade in huge volume daily, irrespective of whether the stock's price is fluctuating. The stocks that comprise indices like the S&P 500, for example, are usually active stocks. Companies like Microsoft, Apple, Amazon, General Electric, Ford, AT&T, Walmart, and Target tend to see high trade volume each day. There is no exact volume benchmark to determine an active stock's definition. Some analysts define active stocks as trading at one or two million shares each day. Typically, more than 250 stocks in the United States trade more than five million shares daily. While active stocks are indicated by high volume, this can apply to sizable price movement at times, and most outlets would distinctly differentiate a volume-based active stock from a price-based active stock. Daily, traders and exchanges list active stocks with both volume and day's loss or gain. Stocks might be actively traded solely because they have a huge number of outstanding shares, or because of a special event like a tender offer being available for the company or because of unexpected news.
Most Active Stocks
Exchanges like NASDAQ and NYSE provide daily listings of the Most Active Stocks, usually limited to Te top ten or twenty stocks with the highest trade volume on any particular day. Most Active Stock listings are often similar daily, with the inclusion of stocks featured in major indices like the S&P 500. From day to day, the list changes due to market forces, and is not limited to stocks. Currency, bonds, futures, and ETF often appear on Most Active lists. Most Active lists refer to attractive tools for all types of traders, and day traders often watch Most Active lists for stocks with major price fluctuations and high volume.