Liquidity , Volume and Delivery Percentage

Liquidity represents the order book with limit orders at Bid and Ask prices levels. 

Volume typically represents higher number of executed orders or trading transactions.

Higher liquidity not necessarily has to transform into high volumes unless the active buyer or seller who places the market order are aggressive. And also low trading volume does not mean low liquidity.

liquidity != Volume

Security Wise Delivery Volume means no of shares marked for delivery from the total traded quantity .In layman terms, it tells how many investors are willing to accept the shares in their demat account. A higher delivery quantity means serious trading and balance is intraday play.

Volume != Delivery Quantity 

Most of the analysts give importance to volume or traded quantity. On the other hand, as an investor I give more importance to Deliverable Quantity/Delivery Percentage.

Importance of Delivery Percentage

Delivery volume is not able to capture the sharp deviations in volume and intraday activity. In Security Wise Delivery Position analysis, an investor should check for Delivery Percentage i.e. % of Deliverable Quantity to Traded Quantity. This is one of the matrices to identify a stock trend. If there is an increase in Delivery Percentage then it implies that investors are accepting the delivery of the stock. Which in term imply that investors are bullish on stock i.e. they anticipate the stock price to increase further. The Security Wise Delivery Position file available on NSE website is for a single day. You need to capture this information over a period of time to establish the trend. As an investor, i don’t invest in stocks whose delivery percentage is less than 50%. In my Security Wise Delivery Position analysis, i observed that stocks with greater than 50% Delivery percentage provide more stable returns. Obviously Security Wise Delivery Position analysis cannot replace the fundamental analysis or any news driven upticks/downticks.