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I saw a stock which had a 730% vs average stock volume one day, so I assume that means lots of people are buying it and demand is high?
But at the same time, the price only went back and forth 0.2 $ (mostly) over the day, i.e. a percent back and a percent forward, it never took off with like 10-20% up.

But how is it possible that demand is 7.3x the average day, yet the price is very, very stable. What is happening there?

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    what stock? hard to answer without looking at what you're looking at
    – littleadv
    Mar 14 at 18:16
  • @littleadv Gitlab. It's been doing this during the day today. It had a lot of trading after-hours yesterday, huge fall, but when the market opened, the volume wasn't huge.
    – user326964
    Mar 14 at 18:17
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    It is now. After the drop. So there were a lot of people dumping the stock due to bad earnings report and a bunch of people willing to pick it up at a significantly lower price. Sounds like a pretty common behavior when unexpected news are published (either direction).
    – littleadv
    Mar 14 at 18:22
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    @littleadv So basically there are just as many buyers as there are sellers, and that there are many of both?
    – user326964
    Mar 14 at 18:24
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    Looks like it, yes
    – littleadv
    Mar 14 at 18:26

2 Answers 2

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High volume does not necessarily mean high buying demand - it could mean that there is high supply, meaning that there are a lot of sellers wanting to dump the stock.

There could be lots of reasons for higher volume - perhaps the stock was just added to some index? Or that there was recent news that increased activity but an equal number of buyers and sellers? Or that there are panic sellers for the short term but lots of buyers for the long term.

There's not really a fundamental reason that can be applied in all cases.

In this particular case (GitLab), my interpretation is that earnings were announced, the market wasn't too happy about it (it dropped 30% overnight) but there seems to be a consensus on what the fair price is. Many investors are probably cutting their losses at the going price but not necessarily panicking, and there are many that seem to like that price and are willing to buy.

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  • What happens usually in that case after-hours? I read in some report by analysts that they're saying the stock is a good buy, but that if it drops below 30 $ then people might panic-sell and it would drop precipitously. Is it more likely to rise or drop when the market closes in after-hours with this behavior now? Is there some kind of indication in this of what is likely to happen approximately (slow rise, slow fall, quick rise, quick fall)) after today based on this?
    – user326964
    Mar 14 at 18:28
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    If you're asking me if the stock will plummet if it hits $30, I have absolutely no idea. There is no "usually" for stocks - there are patterns that sometimes hold true but in the end these decisions are made by (irrational) humans that aren't beholden to patterns.
    – D Stanley
    Mar 14 at 18:46
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This simply means that the price supported both buy-side demand and sell-side supply.

If the price was $10 and demand was for 1,000 shares and supply was 100 shares at that price, the price would have to rise to match supply and demand. Maybe that looks like $15, with demand for 700 shares and 700 shares supplied. If it was flipped and demand at $10 was 100 shares while supply was 1,000, the price would be pushed down to increase demand and reduce supply.

In your case, for whatever reason (and there can be many), both supply of and demand for this stock jumped at the existing price.

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  • Ah ok. The stock is Gitlab, this happened today. marketwatch.com/investing/stock/gtlb, it had a lot of movment during after-hours yesterday, but the volume wasn't 730% when the market opened, so I'm guessing the after-hours thing isn't what makes the 730% today.
    – user326964
    Mar 14 at 18:20

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