What does ‘turnover’ in the stock market indicate?

1. Market turnover indicates how much trade activity took place on a given working day in the market as a whole or individual stock.

2. The turnover can be represented in two ways, traded value in rupees and traded volume in number of trades.

3. Higher turnover in a share indicates better liquidity which means it is easier to sell the stock on the market.

4. The turnover ratio for the market as a whole is calculated as the ratio between turnover in rupees and market value.

5. Liquidity and market sentiment are two major factors affecting market turnover.

(The content on this page is courtesy of the Center for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)

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