What it is
“Active stocks” is a term for company shares that have a lot of transactions on an exchange and whose price tends to move a lot in a single day. In general, such stocks have a large number of outstanding shares.
There isn’t a strict rule on how many buyers, sellers, or transactions are needed for a stock to be seen as active.
A company’s performance and prospects, as well as how the market views it, affect how it’s traded. That’s why being active isn’t a permanent condition, as trading could slow for a company that no longer excites investors.
Conversely, shares that weren’t moving much in the past may become active if the company starts making moves that cause it to be traded heavily.
What it means for you
Active stocks are usually quite liquid, so you probably won’t have a hard time finding buyers or sellers.
That can be essential if you make several transactions for the same stock in a day, and reassuring if you prefer shares that you can sell quickly.
Since there is no absolute metric on what would make a stock active, you may have to come up with figures that are acceptable for you. That is, if you want to make this a factor in your stock trading.
