On an intraday chart, I see buying and selling spikes that coincide with indicators or news throughout an average day.

But my question is, what exactly is happening when I see a quick major buying volume or sell off independent of news? And I stress 'quick' spikes as some of them jump thousands upon thousands of shares within a fraction of a second.

Are they:
1) Independent investors buying/selling huge volume all at once?
2) Stops/Trailing Stops getting automatically triggered?
3) Other forms of automated triggering?
4) Investment firms/Fund Managers buying/selling large amounts of their portfolio all at once?
5) Firms manipulating the outcome of prices by buying/selling in large volume?

Hi Chasleo,

All good questions and each of the things that you have listed here are possible reasons that the volume in a particular instrument could spike.

For day traders the answer to the question of what caused the volume spike can be an important one. In order to ascertain this many traders will watch their level two quote screens to see what information shows that that can help them answer this question.

For longer term traders it is not normally so important what caused the spike than the fact that there was a spike and whether or not this should factor into their trading. The may way in which it does normally I would think is by showing how much participation or lack thereof there was in a move.

Hope that helps.

Best Regards,
Dave