Volume of Trade in 2025: What Australian Investors Need to Know

The volume of trade is more than just a number scrolling across your trading app — it’s a real-time pulse check on the Australian financial market. In 2025, with market volatility and new trading technologies, understanding volume is a must for investors looking to get ahead.

What is Volume of Trade and Why Does It Matter?

Volume of trade, sometimes simply called ‘trading volume’, refers to the total number of shares or contracts exchanged for a particular asset during a specific period. For the ASX and other Australian markets, this is reported daily and is one of the most-watched statistics among traders, fund managers, and regulators alike.

• Liquidity Indicator: High volume usually means a liquid market, making it easier to buy or sell assets without large price swings.
• Market Sentiment: Sudden spikes or drops in volume often signal shifts in investor sentiment — bullish or bearish — before price movements catch up.
• Confirmation Tool: Experienced traders use volume alongside price data to confirm trends and avoid false signals.

For example, in March 2025, several ASX-listed renewable energy companies experienced a sharp uptick in trading volume following the federal government’s expanded carbon credit policy. The surge was an early sign of renewed investor interest, even before share prices saw significant movement.

2025 Trends: What’s Driving Volume on the ASX?

This year, several factors are reshaping how and why assets trade hands on Australian exchanges:

• Algorithmic and Retail Trading: Automated trading now accounts for nearly half of all volume on the ASX, according to early 2025 ASIC data. At the same time, retail participation — especially via low-fee trading apps — continues to rise, making volume patterns less predictable than in the past.
• Policy and Regulatory Shifts: The introduction of new tax incentives for green investments and the tightening of disclosure rules around market manipulation have altered trading strategies and, by extension, volume patterns across sectors.
• Geopolitical and Macro Events: The ongoing China-Australia trade negotiations and fluctuations in global commodity prices have triggered significant volume swings in mining and agricultural stocks during key announcements.

For instance, when the Reserve Bank of Australia surprised markets with a rate hold in February 2025, the volume of trade in bank stocks spiked sharply, outpacing the ASX’s average by nearly 40% for the week.

How to Use Volume Data for Smarter Investing

Understanding volume isn’t just for day traders. Long-term investors and SMSF trustees can use volume trends to:

• Spot Breakouts or Reversals: Major price moves with high volume often indicate genuine shifts, while moves on thin volume may be less sustainable.
• Gauge Market Interest: New IPOs or sector ETFs with consistently high volume can signal broad market acceptance, while low volume may suggest a lack of conviction or liquidity risk.
• Time Entry and Exit Points: Watching for volume spikes around earnings reports, policy announcements, or geopolitical events can help investors decide when to buy, hold, or sell.

For example, when a small-cap tech company on the ASX sees a sudden rise in both price and volume after launching a new AI platform, this combination can indicate that institutional investors are building positions — a potential green flag for others considering an entry.

Volume Isn’t Everything — But It’s a Powerful Tool

Volume of trade should never be used in isolation, but as part of a broader strategy, it can offer valuable context and help filter out market noise. In 2025’s fast-evolving Australian financial landscape, keeping an eye on volume is essential for anyone seeking an edge — whether you’re a seasoned trader or a first-time investor building your portfolio.