Volume Trending Higher This Quarter

Volume is up.

Average daily volume is up sharply in the fourth quarter and now exceeds the average for the first 10 months of the year.

In the first half of the fourth quarter, average daily volume stands at 6.3 billion shares, according to data from BATS Global Markets. Thats a 9 percent increase over the third quarter. Its also a tad higher than the 6.2 billion share daily average of the first 10 months of the year.

Kissell Research Group, which forecasts quarterly volume, is expecting the full quarter to be level with Q3 for large capitalization stocks and higher for small caps.

This is counter to typically fourth quarter trends where markets often experience a reduction in volumes toward the end of the year due to the holiday season, Kissell recently reported.

For the first 10 months of the year, volume is still 4.7 percent lower than it was during the full year 2012.

Behind the sluggishness, according to the analysts at Kissell, are higher, yet less volatile stock prices. The S&P 500 Index is up about 23 percent so far this year. The CBOE Volatility Index, or VIX, is now down around 13-about as low as it gets.

As stock prices increase, investors-restrained by the amount of money they can throw into the market-will purchase fewer shares, Kissell noted in its report. And, when stock prices dont bounce around as much, investors find fewer investment opportunities, so they trade less.