Total Traded Qty V/s Delivered Qty...

[RitikaGupta]

Hi,

Can someone please help me understand this?

Suppose on 1st jan'15, there were 1000 "Total Traded Quantity" of Company A.
The delivery Quantity that day was 300 Shares.

1) So, what happens with the rest 700 shares?

2) Suppose I buy 200 shares intraday in morning and the trade get squared off in afternoon automatically, then it means i Sold forcefully, but Who bought? I mean who is the owner of those 200 shares after they are Squred off?

3) In this example can we say the Real / True supply was 1000 Shares but Demand was Only 300 Shares? OR is it like that the Real/ True Supply was 300 shreas??

Please help me understand this.

 

[RAGAV]

1) The 700 shares were basically intraday trades. They were squared off during the day.

2) Generally, the owner of the shares and the seller of the shares is the floor trader who trades from the exchange floor.

3) Supply is equal to demand. So the delivery (net demand/supply) was 300 shares.

 

[RitikaGupta]

2) Generally, the owner of the shares and the seller of the shares is the floor trader who trades from the exchange floor.

In this case, I was the owner of those 200 Intraday shares (not Floor Traders) so in this case, If i have to Squareoff Forcefully, who will finally Buy it?

I am just not able to understand where do these 200 shares go once squared off?

Also, do these 200 shares explain Demand/ Supply at all?

3) Supply is equal to demand. So the delivery (net demand/supply) was 300 shares.

But what about those 700 shares? do they not explain the demand/ Supply at all?

those 700 shares are just the Noise? I mean are they just the "changing hands intraday"?

 

[RAGAV]

"In this case, I was the owner of those 200 Intraday shares (not Floor Traders) so in this case, If i have to Squareoff Forcefully, who will finally Buy it?

I am just not able to understand where do these 200 shares go once squared off?

Also, do these 200 shares explain Demand/ Supply at all?"

You were the owner of those 200 intraday shares. But you bought it from the floor traders and when you square off forcefully, the floor traders buy it from you.

"But what about those 700 shares? do they not explain the demand/ Supply at all?

those 700 shares are just the Noise? I mean are they just the "changing hands intraday"?"

All (700+300) shares can be considered from technical analysis perspective to study the supply/demand because the ratio of delivered qty/total traded qty will mostly stay within a range for a given stock unless there is a big change in fundamentals when delivery qty will exceed those of normal days by huge margins.

But these 700 shares are just changing hands intraday which are squared off and are back with the floor traders at the end of the day.

 

[RitikaGupta]

All (700+300) shares can be considered from technical analysis perspective to study the supply/demand because the ratio of delivered qty/total traded qty will mostly stay within a range for a given stock unless there is a big change in fundamentals when delivery qty will exceed those of normal days by huge margins.

1) Why these 700 has any explanation for Demand/ Supply?

To me they just appear to be a "Virtual Supply" or FICTITIOUS. Then how they explain Demand/ Supply?


2) The ratio of 300 / (300 + 700) (Delivery to Total Traded) to me sound a good theory with no Practical use. It's like you are taking a ratio of

True Data / (True Data + Virtual Data)

You still think this ratio make any Logical Sense?

3) You are saying one case can be when Deliverable volume % is significantly higher than the average %s of previous N days, one of the reasons could be there is any Potential Change in Fundamentals of the company.

If this is the case, then why would Floor Traders Trade Less Intraday on that particular day? What stops them?

 

[RAGAV]

1) Why these 700 has any explanation for Demand/ Supply?

To me they just appear to be a "Virtual Supply" or FICTITIOUS. Then how they explain Demand/ Supply?


2) The ratio of 300 / (300 + 700) (Delivery to Total Traded) to me sound a good theory with no Practical use. It's like you are taking a ratio of

True Data / (True Data + Virtual Data)

You still think this ratio make any Logical Sense?

3) You are saying one case can be when Deliverable volume % is significantly higher than the average %s of previous N days, one of the reasons could be there is any Potential Change in Fundamentals of the company.

If this is the case, then why would Floor Traders Trade Less Intraday on that particular day? What stops them?

1) and 2)
Even though the 700 shares are squared off intraday, they still are being traded in a certain price range compared to the previous day. If the stock is very bullish/bearish compared to previous day/week, this will be reflected even in the price of intraday traded shares. This is the reason that when you want to consider the volume of a stock with respect to price, you can consider the total traded quantity (1000 shares). There is no need to take any ratio of 300/1000 or any other number to consider the strength/weakness of a particular stock and its trend.

3)
Floor traders don't trade less intraday on that particular day. The normal traders/investors buy(or sell) more delivery quantity on that particular day.

In fact floor traders don't control the amount of trades they make on any day. They only change their bid/ask prices depending on the stock and its trend. They are obliged to fulfil any buy/sell orders from market participants.

So the volume traded by floor traders depends on the market participants.
When common traders buy or sell more intraday, floor traders are obliged to do the same.

 

[mastermind007]

It is easier to understand the process with just one share


A ---Sold to--> B -> C -> D ---Sold to--> E

A had the share at the start of the day.
E took the share home at the end of the day.

B, C, D traded intraday and made some profit/loss

Volume will be reported as 4 and delivery will be reported as 1

 

[asnavale]

Hi,

Can someone please help me understand this?

Suppose on 1st jan'15, there were 1000 "Total Traded Quantity" of Company A.
The delivery Quantity that day was 300 Shares.

1) So, what happens with the rest 700 shares?

2) Suppose I buy 200 shares intraday in morning and the trade get squared off in afternoon automatically, then it means i Sold forcefully, but Who bought? I mean who is the owner of those 200 shares after they are Squred off?

3) In this example can we say the Real / True supply was 1000 Shares but Demand was Only 300 Shares? OR is it like that the Real/ True Supply was 300 shreas??

Please help me understand this.

It is simple. When a trade takes place the buying and selling quantities are matched. A trade will not go through if there are no shares to match the demand in either direction. It does not matter whether the quntity sold/bought is actually available in the Demat A/c. That means, the total traded quantity is not matched or verified with available quantity in Demat A/c. But, for delivery, the quantity sold has to be available in the Demat A/c which is verified by the Broker before sending the order to exchange. So, deliverable quantity is always matched with the available quantity in Demat and therefore for deliverable quantity there is always an owner of the shares.

In case of intraday trades where the trade has to be squared off, there is no verification of quantity available in Demat. Only the quantity sold and quantity bought are matched. Therefore, there is no owner of the shares but only buyer and seller are there. So, for every completed trade the quantity is always matched and therefore, quantity sold equals quantity bought. Therefore, at the end of the day when the auto square off takes place, the pending bought volume is already matched with the sold volume which means equal number of sold shares are also pending. Therefore, in auto square off these pending quantities match and net pending volume at the end is zero. So, there is no question of ownership. The demand - Supply are equal at the trading time itself. So, there is nothing like true demand/supply.

-Anant