How can the volume of a share traded in a day vary so much?

moneylover

Today I was reading that the small cap manager Mark Slater had bought nearly a third of a million shares in All Leisure Group.

When I looked at the share over the last few weeks on Yahoo Finance there are days when the share doesnt trade at all; the average is tens of thousands and then there are a couple days when huge numbers nos of shares change hands yet the share price does not necessarily change. Where do all these shares suddenly come from to match up a buyer wanting a huge sum?

http://uk.finance.yahoo.com/q/hp?s=ALLG.L

darkpool

Typically when retail investors buy shares they speak to a stockbroker, the SB then contacts a market maker. This market maker is a bit like a shop, he has a whole range of shares in his "shop" for people to buy.

moneylover

so there is a percentage of shares with the market makers that they keep on their books presumably for institutional and big retail investors like fund markets?
Still seems a strange thing that some days absolutely no one buys a share when more normally tens of thousands going through.

bobthedambuilder

I thought the way it worked was like this: A specific market maker concentrates on only a few shares, and knows where big chunks of them are held (with institutional investors). If he's asked by a stockbroker to find a large tranche of shares that somebody wants to buy, he'll ring round his contacts to see what they'd sell for, and if he can match up buyer and seller(s), the deal is done.

Hey, but what do I know, I'm just a builder ...:o.

Edit: on reflection, that's not a million miles away from what darkpool said about shops. Liken a market maker to say a greengrocer - he knows how to get hold of fruit and veg.

moneylover

yes, thanks that makes sense ie like Woodford selling his Tesco and Buffet buying the shares...