During periods of heavy trading, the consolidated tape may display a “deleted volume” note, indicating that some data may be omitted to allow the tape to recover. This can put traders at risk of making decisions based on outdated information. Volume information may be omitted for small volume trades, and depending on who runs the tape, volume information may be omitted for trades below 5,000 or 10,000 shares. When the tape recovers, the display will revert to the traditional format. The cleared volume warning is generally a sign that the market is moving rapidly up or down, which can create chaos and panic among investors. In extreme circumstances, trading may be halted or closed for the day.
Deleted volume is a note that sometimes appears on the consolidated tape used to report trades across multiple markets during heavy trading periods, alerting people to the fact that some data may be omitted to allow the tape to recover. This is typically done when the tape is two minutes or more late, potentially putting traders at risk of making decisions based on outdated information during periods of very robust trading. When this note is displayed, it means that only stock symbols and prices will be displayed, with volume information for small volume trades removed.
Volume information provides data on how many stocks are trading, and while it can be useful for investors when trading is heavy, the tape can’t keep up when it comes to displaying all the activity going on across different financial markets. The ticker will flash “volume erased” to inform people, and once the tape has managed to recover, the display will revert to the more traditional format, showing volume and other pertinent information.
Depending on who runs the consolidated tape, trading volume information when less than 5,000 shares are involved may be omitted or the tape may omit volume information on all trades below 10,000 shares. Either way, the tape will be able to recover the deleted volume, as it takes less time to display just one symbol and the current trading price. People active during that trading day may also take note that the cleared volume alert was flashing, so they know to look up trades of interest later if they want to get more insight into trading volume.
When the market is so active that the consolidated tape should flash a cleared volume warning, it is generally a sign that the market is moving rapidly up or down. Either people are trying to buy low and sell high, taking advantage of an uptrend, or they are trying to dump underperforming stocks before they lose any more value in a crash.
Rapid trading can sometimes exacerbate market problems by creating chaos and panic among investors – a concern on many trading floors – and in very rare cases, traders in a financial market may temporarily halt trading or close for the day to avoid a disaster. This is a costly and controversial move and is only undertaken in extreme circumstances.
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