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Closing Price

Moneyzine Editor
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Moneyzine Editor
1 mins
January 11th, 2024
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Closing Price

Definition

The term closing price refers to the last price of a contract or security at the end of a trading session. The closing price is available shortly after 4:00 p.m. Eastern Time.

Explanation

The closing price is the last trading price of a security or contract on a given day. The value is important because it becomes the benchmark for a price increase or decrease on the following trading day. Since trading can occur after-hours, those price quotes are accompanied by the letter T, which tells traders this was not a regular session trading price and will not affect a quoted high or low on the proceeding day.

Even though after-hours prices are ignored from a benchmarking standpoint, they do reflect the market's sentiment towards a security, such as common stock, and options or futures contracts. For this reason, investors should consider all price information prior to trading a security.

Adjusted Closing Price

One variation on a closing price is the adjusted closing price. These adjustments help traders to understand the effect of a corporate action on the price of an equity. For example, if a company announces a 2 for 1 stock split and the closing price of their common stock was $100.00 per share, the adjusted closing price would be $100 / 2, or $50.00 per share. The same holds true for the less common reverse stock split.

Related Terms

  • Closing Bell
    The term closing bell refers to the ringing of a bell that signals the end of securities trading for the day. The most notable of the closing bells is that of the New York Stock Exchange.
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    Moneyzine Editor
    January 11th, 2024
  • Close (Investing)
    The term close refers to the end of a trading session as determined by the financial market or exchange. Traders may have the option of placing orders after the close, which is known as after-hours trading or extended hours.
    Moneyzine Editor
    Moneyzine Editor
    January 11th, 2024
  • Class B Shares
    The term class B shares refers to common and preferred stock that may offer their holders fewer benefits, or charge higher fees in the case of mutual funds. Class B shares are normally subordinate to class A shares in terms of liquidation preference.
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    Moneyzine Editor
    January 11th, 2024
  • Class A Shares
    The term class A shares refers to common and preferred stock that offer their holders additional benefits, or different fees in the case of mutual funds. Class A shares normally have liquidation preference over all other shareholder classes.
    Moneyzine Editor
    Moneyzine Editor
    January 11th, 2024

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