Volume deleted is a note that sometimes appears on the consolidated tape used to report trades across multiple markets during periods of heavy trading, alerting people to the fact that some data may be omitted to allow the tape to catch up. This is generally done when the tape is running two minutes or more behind, potentially putting traders at risk of making decisions on the basis of outdated information during periods of very robust trading. When this note displays, it means that only stock symbols and prices will be displayed, with volume information for trades on small volumes removed.
The volume information provides data about how many shares are being traded, and while it can be useful for investors, when trading is heavy, the tape cannot keep up when it comes to displaying all of the activity going on across several financial markets. The ticker will flash “volume deleted” to let people know, and once the tape has managed to catch up, the display will revert to the more traditional format, showing volume and other pertinent information.
Depending on who is running the consolidated tape, information on volume trading when less than 5,000 shares are involved may be omitted, or the tape may omit information about volume on all trades less than 10,000 shares. In either case, the tape will be able to catch up with the volume deleted, as it takes less time to display just a symbol and current trading price. A note may also be made by people active during that trading day that the volume deleted warning flashed, so they know to look up trades of interest later if they want to get more information about the volume of trading.
When the market is so active that the consolidated tape needs to flash a volume deleted warning, it is generally a sign that the market is moving rapidly up or down. Either people are trying to buy low and sell high, taking advantage of an upward trend, or they are trying to unload underperforming securities before they lose any more value in a crash.
Rapid trading can sometimes exacerbate market problems by creating chaos and panic among investors — a concern on many trading floors — and in very rare cases, the operators of a financial market may temporarily halt trading or close for the day to prevent a catastrophe. This is a costly and controversial move and is undertaken only in extreme circumstances.
