Close
The close is a reference to the end of a trading session in the financial markets when the markets close for the day. **Professional Competition**: Most after-hours traders are professional traders working for hedge funds or investment banks, which makes it hard to compete. **No Guarantees**: There is no guarantee that after-hours prices reflect a security’s opening price the next day since they are entirely different sessions. Most traders should stay away from after-hours trading unless they have a lot of experience and a compelling reason to trade after the close. The most common market holidays include: New Year’s Day Martin Luther King Jr. Day Washington’s Birthday Good Friday Memorial Day Thanksgiving Day The closing price is the price of the final trade before the close of the trading session. Many markets also offer after-hours trading beyond the official close, although traders should exercise caution when transacting outside of traditional market hours. The most visible example of a market close is the close of the New York Stock Exchange (NYSE) when the closing bell is rung, but closing times vary between markets and exchanges.
What Is the Close?
The close is a reference to the end of a trading session in the financial markets when the markets close for the day. The close can also refer to the process of exiting a trade or the final procedure in a financial transaction in which contract documents are signed and recorded.
Understanding the Close
Being aware of when markets open and close is essential for efficient trading, regardless of the exchange or type of security. Knowing when and how to close out a trade is also critical for market participants.
The most visible example of a market close is the close of the New York Stock Exchange (NYSE) when the closing bell is rung, but closing times vary between markets and exchanges.
Common Hours
NYSE equity trading hours are from 9:30 a.m. Eastern Time to 4:00 p.m. Eastern Time. Pre-market hours begin at 6:30 a.m. Eastern Time, while after-hours trading closes at 8:00 p.m. Eastern Time. The bond markets tend to be open a bit longer from 8:00 a.m. Eastern Time to 5:00 p.m. Eastern Time. Futures market hours vary widely based on the exchange and commodity — traders should see the exchanges’ websites for more details.
The most common market holidays include:
Closing Prices
The closing price is the price of the final trade before the close of the trading session. These prices are important because they are used to create traditional line stock charts, as well as when calculating moving averages and other technical indicators.
Since closing prices are widely followed, they may be manipulated by fraudulent traders to make the appearance of a rally. This practice, known as “high close” is especially prevalent with micro-cap stocks that have limited liquidity since less dollar volume is needed to move the price higher.
Traders should be wary of using closing prices as a gauge of micro-cap and small-cap stock successes and look at candlestick charts and other indicators for added insight.
After Hours
Many markets have after-hours trading, which enables investors to place orders after the close of the trading session. While this may be tempting, there are several drawbacks that investors should consider before trading in after-hours sessions.
The primary drawbacks to consider include:
Most traders should stay away from after-hours trading unless they have a lot of experience and a compelling reason to trade after the close.
Related terms:
After-Hours Trading
After-hours trading refers to the buying and selling of stocks after the close of the U.S. stock exchanges at 4 p.m. U.S. Eastern Time. read more
After the Bell
After the bell refers to news, earnings reports, and other activities occurring or released after the stock market close. read more
Bid-Ask Spread
A bid-ask spread is the amount by which the ask price exceeds the bid price for an asset in the market. read more
Candlestick
A candlestick is a type of price chart that displays the high, low, open, and closing prices of a security for a specific period and originated from Japan. read more
Curb Trading
Curb trading occurs outside of general market operations, commonly through computers or telephones after exchanges close. read more
Exchange
An exchange is a marketplace where securities, commodities, derivatives and other financial instruments are traded. read more
Hedge Fund
A hedge fund is an actively managed investment pool whose managers may use risky or esoteric investment choices in search of outsized returns. read more
Late-Day Trading
Late-day trading is the illegal practice of recording trades executed after hours as having occurred prior to a mutual fund posting its daily NAV. read more