Average Daily Trading Volume

Average Daily Trading Volume (ADTV) is the average number of shares or contracts of a security traded per day over a specified historical period — typically 10 days, 30 days, or 90 days — serving as a primary measure of a stock's liquidity and investor interest. High ADTV indicates that a security can absorb large buy or sell orders without significant price impact (low market impact cost), making it suitable for institutional investors who need to build or exit large positions without moving the market. Low ADTV indicates illiquidity — even moderate-sized orders can cause significant price moves, creating bid-ask spread risk and difficulty in exiting positions at desired prices. In Indian equity markets, ADTV is prominently displayed on NSE and BSE stock data pages and is used by institutional investors as a key eligibility criterion — most domestic mutual funds and FPIs limit position sizes to a defined multiple of a stock's ADTV to ensure they can exit within a reasonable timeframe. For retail investors in India, ADTV provides a practical guide to execution risk — stocks with ADTV below ₹1 crore carry meaningful liquidity risk even for modest position sizes. SEBI uses ADTV thresholds to determine stock eligibility for F&O listing — NSE requires a minimum average daily delivery value and a minimum market capitalisation for stock futures and options eligibility.