UK Accounting Glossary
The closing price of a stock is the price of the final trade of the trading day. Unfortunately, the final trade of the trading day — and, hence, the closing price — is not as cut-and-dried as it used to be. In the U.S. the closing price of virtually every stock used to be its final trading price at 4 pm East Coast time. Today, with after-hours trading, the reported closing price of a stock can vary widely. Investors who monitor the value of their holdings based on the day’s closing price must question whether the closing price they are relying on is culled from a single after-hours trade, or if it is the closing price based on the 4 pm closing time of the major U.S. markets. The difference can be significant.
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This glossary post was last updated: 4th February 2020.