What is turnover ratio?
Overview
In this article, we will introduce:
What is the turnover ratio?
How to find it on Moomoo?
What signal does turnover ratio tell us?
What is the turnover ratio?
The turnover ratio of a stock is a measure of sellers versus buyers of a particular stock and reflects the strength of stock liquidity.
The formula of the turnover ratio is:
How to find it on Moomoo?
You can directly read the turnover ratio on the stock quotation page.
What signal does turnover ratio tell us?
Stock with a high turnover ratio means it is more active and it is popular. Individual stocks with a high turnover ratio are often the target of short-term funds chasing. The stock price is flexible but the risk is relatively high.
Except for some highly concentrated stocks, a lower turnover ratio indicates less interest in the stock and the stock price usually moves more stagnant.
When the price of a stock has been rising for several days with a sharp increase in volume, but the stock price is not rising enough, it indicates that the stock is shaking at a high level and the volume is enlarged, could mean that there is an outflow of institutional funds.
If the share price continues to rise with decreasing volume after a sharp rise in the share price, the share price is merely backed by market confidence, indicating that funds are being withdrawn from the stock.
When the share price is at a low level, the exchange rate of 4%-5% on the day should cause investors to be concerned, and on the way up, when the exchange rate exceeds 10%-15%, investors should stay alert.
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. Read more