Closing Price

Closing price is the final price of a security at the end of the trading day. The closing price doesn’t necessarily mean the end of all trading on the security for the day. It simply means the floor of the exchange is closed. After-hours markets remain open for settlement purposes and other custodian activities.

It represents the best and upto date valuation of a security till the time the trading of the security resumes. However, for stocks which get heavily traded at the close, the LTP may or may not be a true indicator of close, because a few moments pass before the orders are processed in all these heavily traded stocks and their last traded price, during the closing period, is determined. Depending on the exchange or quote service, these trades may be posted anywhere from 30 seconds to 30 minutes after the closing bell. Trading also takes place during the ‘after-trading hours’ which ultimately decides the price of the security at the end of the day.

The closing price of a security is compared to its opening price to determine the value addition or value reduction  in the security over a trading day. Even the closing prices of two or more trading days are compared to get a fair idea of the market sentiments of the given security.