What is Turnover in Stock Market? Difference from Volume
Turnover in the stock market is the total value of shares traded during a specific period, measured in rupees. While volume tells you how many shares changed hands, turnover tells you how much money was involved in those trades.
If 5 lakh shares of a stock were traded today and the average price was Rs.200, the day's turnover is Rs.10 crore. A different stock might have traded only 20,000 shares but at Rs.5,000 per share, giving a turnover of Rs.10 crore as well. Volume is very different but turnover is the same. That is why turnover is often a better measure of how actively a stock is being traded.
How is turnover calculated?
Turnover = Number of Shares Traded × Average Trade Price
Exchanges report turnover in crores of rupees. You will see headlines like 'NSE cash market turnover was Rs.85,000 crore today.' This gives a sense of total trading activity across the exchange for that session.
What is the difference between volume and turnover?
| Volume | Turnover | |
|---|---|---|
| Measures | Number of shares traded | Value (in rupees) of shares traded |
| Units | Shares/lots | Rupees (lakhs/crores) |
| Price dependent | No | Yes |
| Cross-stock comparison | Difficult across different price levels | Fair comparison across stocks |
| Best used for | Analysing individual stock activity | Comparing activity across stocks |
Why does turnover matter?
Turnover gives a more complete picture of market activity than volume alone. A stock can have high share volume but low turnover if it is a very low-priced stock. Similarly, a stock can have low share volume but high turnover if each share is worth thousands of rupees.
For exchanges, total daily turnover is a key measure of market health. Rising turnover over time indicates growing participation. Falling turnover can signal reduced interest. For individual stocks, comparing today's turnover to average turnover gives insights similar to the volume comparison.
Investments in securities market are subject to market risks. This article is for educational purposes only.
Frequently Asked Questions
Is higher turnover always better?
Higher turnover generally means better liquidity, making it easier to buy and sell without affecting the price. For an investor, a stock with higher turnover is easier to trade. However, very high turnover can also indicate speculative activity, especially in small-cap stocks where a sudden surge in turnover might be driven by rumour-based trading.
How do I check the turnover of a stock?
NSE and BSE websites display daily turnover for every listed stock. Broker platforms typically show turnover alongside volume in the stock's quote page. Exchange-level turnover for the entire cash and F&O segments is published in the daily market summary available on the NSE and BSE websites.
What is the difference between market turnover and stock turnover?
Market turnover is the total value of all trades across all stocks on the exchange for a given day. Stock turnover is the value of trades in a specific stock. Market turnover tells you about overall market activity. Stock turnover tells you about interest in a specific company.
Why is F&O turnover much higher than cash market turnover in India?
F&O turnover is notionally higher because derivatives contracts have large underlying values relative to the margin paid. When you buy one lot of NIFTY futures, the notional value is NIFTY level multiplied by lot size, which can be Rs.15 lakh or more, even though you paid only a fraction as margin. This makes aggregate F&O turnover appear much larger than cash market turnover, even though the actual capital deployed is smaller.
Does turnover affect stock price?
High turnover accompanied by price movement suggests strong conviction behind the move. High turnover without price movement suggests that buyers and sellers are equally matched. The relationship between turnover and price change helps gauge the strength of a day's trading activity.
Investments in securities market are subject to market risks. This article is for educational purposes only and does not constitute investment advice.
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