Swedish Stock market: Explaining trade volumes in single stocks

Sammanfattning: The Swedish stock market consists of roughly 750 companies listed on fivedifferent markets. Out of all those companies a significant portion are rarelytraded. Stocks where the trading activity is low not only present a liquidityproblem to shareholders and potential investors but also affects the reputation ofthe traded company. A company whose shares are not actively traded does nothave a market that actively puts a value on the company.This study aims to interpret how daily trade volumes can be explained by bothcategorical and numerical variables associated with the companies listed inSweden.This study, contrary to popular belief, shows that the market of the listed stock isto a large degree irrelevant when explaining daily trade volumes of the stockslisted in Sweden. The study instead reveals the importance of factors such asshareholder structure, free float and number of outstanding shares in a company.