What is the Average Daily Trading Volume?

The high volume of trading of an ETF can help us judge the three most traded ETFs in 2022. Let’s understand ADTV or the Average Daily Trading Volume for an ETF. 

What is ADTV or Average Daily Trading Volume? 

Investors refer to the number of shares of a specific stock that change hands on average during a single trading day as Average Daily Trading Volume (ADTV).

The average daily trading volume (ADTV) can be determined for five days, ten days, etc. The average trading volume for 20 or 30 days is a regularly used ADTV metric. 

ADTV of a single stock, options on a stock, or market indexes like the Nasdaq 100 are all tracked. 

The average daily value indicator is an alternative to the average daily trading volume indicator. The average daily value calculates the average dollar amount traded d 

William O’Neil’s ‘How to Make Money in Stocks’ popularized the use of average volume as one of several data sources for investing decisions. 

O’Neil emphasized the importance of paying attention to ADTV for two reasons

• Ensure that a stock is liquid enough to trade fast.
• To ensure that stock traders’ present supply and demand are on your side. 

When a stock’s price declines, its daily volume should be lower than the usual daily volume, indicating that selling pressure is easing.

When a stock’s price has been consolidated and isn’t growing much, you would like to see increasing volume as the prices begin to rise, indicating more buyers are entering the market. When a stock’s price increases, you want the increased volume to indicate that it will continue to rise.

Three most traded ETFs based on three months of ADTV

Symbol	ETF	Avg Daily Share Volume (3mo)	AUM in $ 1000s
TQQQ	ProShares UltraPro QQQ	116,601,047	$15,408,300.00
SPY	SPDR S&P 500 ETF Trust	112,241,844	$385,693,000.00
UVXY	ProShares Ultra VIX Short-Term Futures ETF	82,200,375	$893,935.00

1. ProShares UltraPro QQQ

Overview

TQQQ is a leveraged fund that provides 3x exposure to NASDAQ 100 stocks over a one-day holding period. The underlying index contains 100 of the top non-financial listed companies on NASDAQ based on market capitalization.  

Technology businesses have historically dominated TQQQ’s underlying index; therefore, its future outcomes may have a strong connection to the tech industry.  

The fund uses a quantitative approach to determine the type, number, and combination of investment positions that it expects to deliver daily returns commensurate with its investment objective.  

The fund is a very short-term tactical vehicle and, like many levered products, is not a buy-and-hold ETF. The expense ratio of the ETF is 0.95%.

Performance

Performance [as of 03/02/22]	1 year	3 years	5 years	10 years
TQQQ	13.55%	59.06%	49.35%	47.24%
Nasdaq 100 Index	9.84%	26.86%	22.73%	19.72%

2. SPDR S&P 500 ETF Trust 

Overview 

SPY is the most well-known and oldest US-listed ETF, and it consistently ranks first in terms of AUM and trading volume. The fund tracks the S&P 500, a widely followed US index.  

Few investors are aware that the S&P index committee selects 500 equities to reflect the US large-cap space, not usually the 500 most significant by market capitalization, resulting in occasional single-name absences. 

Nonetheless, the index provides excellent coverage to the US large-cap market. It’s worth noting that SPY is a unit trust, an older but still functional structure. SPY, as a UIT, must completely replicate its index (which it almost certainly would) and forego the negligible risk and return of securities lending.  

It also can’t reinvest portfolio income between distributions, resulting in a cash drain that hurts performance in rising markets but helps performance in down markets. SPY is a popular vanilla trading instrument. The ETF’s expense ratio is 0.09 percent. 

Performance

Performance [as of 03/02/22]	1 year	3 years	5 years	10 years
SPY	14.81%	17.98%	14.97%	14.49%
S&P 500 Index	14.94%	18.06%	15.06%	14.61%

3. ProShares Ultra VIX Short-Term Futures ETF 

Overview 

UVXY is a commodities pool wrapper that provides daily leveraged exposure to short-term VIX futures, which are designed to capture the volatility of the S&P 500.  

UVXY is a short-term trading instrument, not a long-term investment vehicle because it is a geared instrument with daily resets.  

Returns for a holding period of more than one day, and frequently do, differ significantly from 1.5x. UVXY, like its others, offers scaled returns on the front and 2nd-month futures contracts rather than the VIX index itself. 

Investors will receive a K-1 at tax time if they participate in a commodity pool, but they will eliminate the counterparty risk of an exchange-traded note. The fund provided 2x leveraged exposure before February 28, 2018. The expense ratio of the fund is 0.95%. 

Performance 

Performance [as of 03/02/22]	1 year	3 years	5 years	10 years
UVXY	-97.86%	-83.44%	-78.78%	-85.05%
S&P 500 VIX Short-term futures Index	-58.07%	-40.15%	–	–