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Trade Frequency

Trade Frequency measures how frequently a stock trades in a year. On average there are 260 trading days in a calendar year. To calculate trade frequency, we add up the total number of days that a stock was traded in the year (ie some traded volume was recorded) and divide this by the total number of trading days in the years.

For example imagine that a stock had trading volume recorded for 100 days in the last year, then the trade frequency would be 100/260 = 2.6 implying the stock is traded on average every 2.6 days. Liquid stock would have a value less than 1.

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Glossary Definition