Every trader looks at volume. A high volume breakout is one of the most classic signs of a stock making a significant move. However, volume alone can be misleading. To truly understand the conviction behind a price move, you need to look one level deeper and analyze the **Delivery Percentage**.
Total Volume
This is the total number of shares that changed hands during the day. It includes all trades, whether they were held for a few seconds (intraday) or for the long term.
Delivery Percentage
This is the percentage of total volume that was **not** squared off the same day. These are shares that buyers actually took possession of in their demat accounts, indicating an intention to hold for more than a day.
The Iceberg Metaphor
Total Volume is the entire iceberg, but Delivery Volume is the massive, significant part hidden from plain sight.
Interpreting the Scenarios
Here’s how to combine these two metrics to get a clearer picture of market sentiment.
Scenario 1: High Volume + High Delivery %
This is a strong bullish signal. It means that not only was there high interest in the stock, but a large portion of those trades resulted in buyers taking delivery. This suggests strong conviction and accumulation by investors who believe the price will continue to rise.
Scenario 2: High Volume + Low Delivery %
This is a weak or speculative signal. The high volume was likely driven by short-term, intraday traders. The lack of delivery suggests that few participants had the conviction to hold the stock overnight. This volume spike is often unsustainable and can be misleading.
A Trader's Rule of Thumb
When you see a price and volume breakout, always check the delivery percentage. A delivery percentage of over 40-50% lends much greater credibility to the move.
Separate Signal from Noise
Don't get fooled by meaningless volume spikes. The Daily Market Scan tool puts the **Volume Breakout** and **Delivery Percentage** metrics side-by-side, giving you the context you need to make an informed decision instantly.
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