Understanding The Importance Of Shares Delivery Quantity To Total Traded Quantity

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Many investors tend to check volumes in a stock and are rather happy, if they have bought a stock and see the volumes going up significantly.

However, more important then studying the volume of a stock or shares is to study the percentage of of deliverable quantity to total traded quantity.

Understanding Importance Of Shares Delivery Quantity To Total Traded Quantity
Now, let's cite an example. On Oct 16, HDFC Bank had a total traded quantity 12,10,292 shares. The deliverable quantity of the shares was 6,87,545 shares, implying that the total deliverable quantity to traded quantity was 56.78 %.

What it means that investors have paid cash and taken delivery of the shares, so as to enable credit in their demat account.

Generally speaking higher the per centage, the better it is. Some stocks go up with a significantly lower per cent of total deliverable quantity to traded quantity per cent. This means there is more trader interest in the stock.

If you generally see, the high quality stocks like HDFC Bank have a significantly higher per cent of this. Ditto for other names like ICICI Bank, Larsen and Toubro, Reliance Industries and Infosys.

This implies that investors have solid faith in the stock which is why they are prepared to take delivery. In fact, almost all of the equity mutual funds have the shares of HDFC Bank in their portfolio.

Many stocks have a very low percentage of Shares Delivery Quantity To Total Traded Quantity. This would signify that there is more squaring-off on the same day in the stock. It is safe to assume that there is more trader interest in the stock, rather then long term investors interest.

Some stocks even have 15% of shares delivery to total traded quantity.

Where to check Shares Delivery Quantity To Total Traded Quantity?

These details are available on the NSE and the BSE website. For example, you can visit the nseindia.com website. After than you can click the name of the company. For example, if it is ICICI Bank, just type in the word. It will throw the ICICI Bank stock quote and below you can see shares Delivery Quantity to Total Traded Quantity

Remember, before investing, you can check this parameter. However, no investing should be based on one parameter alone. And, we cannot conclude that a high delivery per cent of shares, means the shares are the best.

Investing is far more complicated then that. All other parameters must also be considered before investing. This is just an indicator, and does not mean it is the best indicator around. 


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