What is relative volume (RVOL)?
Relative volume, usually shortened to RVOL, compares how much a stock is trading now with how much it usually trades. An RVOL of 1 means a normal amount of trading. An RVOL of 3 means three times the usual amount. An RVOL of 0.5 means half.
Raw volume can't tell you that on its own. Two million shares is a quiet day for some stocks and the busiest day of the year for others. RVOL puts every stock on the same scale, which is why day traders use it to sort a list of stocks that are moving, and why almost every scanner built for small caps has it.
The idea behind it is simple: when many more shares change hands than usual, something has changed. Often it is news, an earnings report, a filing or a move in the whole sector. Sometimes there is no clear reason at all. Either way, a stock with a high RVOL is a stock with attention on it, and attention is what small-cap day traders look for.
How RVOL is calculated: by day and at the same time of day
There are two common ways to calculate RVOL, and they answer different questions.
By day. Take today's total volume and divide it by the stock's average daily volume over a number of past sessions. If stock A, a made-up example, averages 500,000 shares a day and trades 1.5 million today, its RVOL for the day is 3.
The problem with this version is the clock. At 10:00 ET, today's volume covers half an hour of the regular session, while the average covers whole days. So RVOL by day starts low every morning and climbs through the session, even when nothing unusual is happening. It is useful after the close, to review which stocks were busy. During the session, it understates what is going on.
At the same time of day. Take today's volume up to now and divide it by the average volume of those past sessions up to the same time. If stock A has traded 400,000 shares by 10:00 ET, and on a typical day it has traded 100,000 by 10:00, its RVOL is 4, even though the day is far from over.
This second version is the one that means something during the session. It compares like with like: this morning against other mornings, not against whole days.
| By day | At the same time of day | |
|---|---|---|
| Compares | Today's volume with an average full day | Today's volume so far with the usual volume by this time |
| At 10:00 ET | Low for almost every stock | Shows which stocks are busy right now |
| Most useful for | Reviewing a session after the close | Building and checking a list during the session |
RVOL can also be measured on intraday bars: the volume of the bar in progress against the bars before it. On a 5-minute chart, that tells you whether the last few minutes were busier than the half hour before them, which is a different question from whether the whole day is busy.
Relative volume in Traderly's scanner
In Traderly the filter is called Relative volume (RVOL). You choose a bar size and how many bars to look back. On the daily bar, it is the time-of-day version above: today up to now against the same time of day, over the number of sessions you choose. On an intraday bar, such as 5 minutes, it compares the bar in progress, at its pace so far, with the bars before it.
Traderly's market data is delayed 15 minutes, so the scanner shows each reading as it was 15 minutes ago. It is a tool for building and reviewing a list, and for practicing in replay, not for timing an entry.
What is a good RVOL? Ranges, not promises
No number makes a stock a trade. What small-cap day traders do have is a set of common starting points:
- Around 1: a normal amount of trading. Most stocks, most days.
- About 2 and above: clearly busier than usual. Many traders use about 2 as the lowest RVOL a stock needs to make their list.
- Past 5: unusual. Stocks this busy usually have news, and they tend to be the ones traders look at first in the morning.
These are habits, not odds. A stock at an RVOL of 8 can drift sideways all day, and one at 2 can have the cleanest chart of the morning. Use the thresholds to decide what deserves a look, then read the chart, the news and the float before anything else.
The right threshold also depends on the clock. At 09:45 ET, an RVOL of 3 measured at the same time of day means something. At 04:15 ET, in the first minutes of the premarket, an RVOL of 30 can be a handful of trades, as the section on the premarket below shows.
RVOL vs average volume vs raw volume
Three numbers sit side by side on most scanners, and each answers its own question.
- Raw volume (in Traderly, the Traded today filter): how many shares have changed hands so far today. It tells you whether a stock is liquid enough to trade. A stock that has traded 50,000 shares by 09:45 ET can be hard to get in and out of, whatever its RVOL.
- Average volume: how much the stock usually trades in a day. It is the baseline RVOL divides by, and it tells you what kind of stock you are looking at.
- Relative volume: the ratio between the two, adjusted for the time of day when it is calculated that way. It tells you whether today is unusual for this stock.
You need at least two of them. A high RVOL on a stock that has barely traded can be a few thousand shares, too thin to trade. A large raw volume on a stock that always trades that much is just a normal day. That is why traders often ask for both: an RVOL above their threshold and a minimum number of shares traded.
RVOL in the premarket: why early readings swing
The premarket starts at 04:00 ET. In its first minutes, many small caps trade almost nothing on a typical day, so the baseline RVOL divides by is tiny. A few hundred shares against a usual few dozen read as a huge multiple.
Here is an illustrative example. On a normal morning, stock A has traded about 2,000 shares by 04:30 ET. Today, by 04:30, it has traded 60,000: an RVOL of 30. By 07:00, it has traded 300,000 against a usual 20,000, an RVOL of 15. By 09:00, it has traded 900,000 against a usual 100,000, an RVOL of 9. The stock got busier all morning, and its RVOL fell, because the baseline grew faster than the stock's own volume.
What traders commonly do about it:
- They read early premarket RVOL as a hint that something is happening, not as a ranking.
- They read it next to raw volume: an RVOL of 30 on 5,000 shares is a few trades.
- They check it again later in the premarket, once the baseline is large enough to mean something, and once more after the open.
Volume also gathers around news. A stock with a headline at 07:00 ET will often trade most of its premarket volume after 07:00, and its RVOL jumps then, whatever it read at 04:30.
Why RVOL is not a signal on its own
RVOL tells you a stock is busy. It doesn't tell you which way it will go. A stock can trade ten times its usual volume while it falls, because heavy selling is volume too.
Before RVOL means anything for a trade, traders usually check four other things:
- Direction. Is the stock up or down since its open, and where does it sit against its premarket high and low?
- Catalyst. Is there news, a filing or an earnings report behind the volume? A stock with a clear reason tends to hold attention longer than one without.
- Float. The number of shares available to trade. A high RVOL on a low-float stock can move the price much further than the same RVOL on a stock with hundreds of millions of shares.
- Price. Many small-cap traders stick to a price band, because very cheap stocks behave differently and expensive ones need a larger account for the same position.
That is why RVOL usually sits in a scanner next to a gap filter, a price band and a float filter. The premarket gap scanner guide puts them together into a morning scan, and the gap and go guide shows how traders use a busy gapper once the market opens. To watch RVOL change through a whole session, the guide to practicing day trading shows how to replay one, minute by minute.