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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a sharp rise in the share price, the share price is merely backed by market confidence, indicating that funds are being withdrawn from the stock.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.
Editor: Tommy
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