Closing Price Discrepancies
Closing prices are essential information in the day to day financial decisions of investors. Learning how the media or the market data vendors present the market closing prices is an important component of making investment decisions.
Sometimes the closing price indicated in the website of the company in which you are invested is different from the closing price provided in the evening news. Sometimes, different news programs across different stations also report varying closing prices. Such closing price discrepancies among different sources can be very perplexing to new investors. There is, however, a very simply explanation for such closing price discrepancies.
Different Market Trading Hours
Regular market trading in major market centers like the American Stock Exchange, the New York Stock Exchange and the Nasdaq usually starts at 9:30 in the morning and ends at 4:00 in the afternoon (Eastern Time).
With the introduction of electronic communications networks in the 1990's, however, trading after regular market hours have become more prevalent. Now after-hours trading is no longer limited to institutional investors. Retail and individual investors have also started trading after hours - and these investors need information on securities' closing prices.
The prevalence of after-hours trading is the main cause of discrepancies in reported closing prices. Some news networks report the 4pm price as the closing price, while some report the price after 4pm as the closing price.
Remedying Closing Price Discrepancies
To some extent, the Consolidated Tape Association has already taken steps to remedy the confusion wrought by closing price discrepancies. To make closing prices uniform, it has designated the 4 pm price as the regular session closing price. It will, however, report a 4:15 market summary for the media and the investors. Such a summary will reflect last minute orders that came in before 4pm but were not executed in time for the 4pm closing.
Similar to the Nasdaq convention, it will also use the prefix T in the consolidated tape to distinguish stock prices after the 4pm regular session closing. After-hours stock prices will not affect the regular session closing price as well as the high and low prices of registered during regular market hours.
Rate this article : Low | High |
- Stock Investing vs. Saving
- Investment Goals Planning
- Mutual Funds vs Individual Stocks
- Classes of Assets - Asset Class Definition
- Stock Investing Basics
- Setting Stock Prices
- Stock Buyback Reasons
- Stock Basics
- Stock Dividends Basics
- Stock Market Cycles
- Federal Reserve Board (Fed) Functions and Importance
- Stock Market Sectors Classification
- Stock Split Basics
- Stock Market Indexes and Fair Value Indications
- Stock Market Movements
- Stock Share Types
- Bid and Ask Prices
- Stock Trading Basics and Order Types
- Market Makers Role and Responsibilities
- NYSE and Market Specialists
- Company Market Capitalization
- Stock Price Influences
- Stock Order Types
- Newspaper and Online Stock Quotes
- Stop Loss Order Fundamentals
- Trailing Stop Order Basics
- Advance Decline Ratio Basics
- Foreign Stocks Basics
- Asset Allocation Basics
- IPO Basics and Strategies
- Earnings Season Basics
- Option Basics and Types
- Consumer Price Index Basics
- CPI Basics
- Rising Interest Rates and their Effects
- Stock Market Investing Basics
- Why Do Companies Go Public
- Introduction to Stocks
- Stock Price Volatility
- Fundamental Analysis Technique Basics
- Technical Analysis Basics
- Importance of Current Assets and Current Liabilities
- Price/Book Value Advantages and Disadvantages
- Understanding Return on Equity and Return on Assets
- Understanding Inventory Turnover Ratio
- Price to Earnings Growth Ratio (PEG) Explanation
- Price to Earnings (P/E) Ratio Basics
- How to Read Stock Tables
- Understanding Trade Execution
- Auditing Essentials
- Understanding Mutual Companies
- What Are Financial Analysts?
- What Investors Need to Know about Financial Analysts
- Investment Planning 101 – Getting Started on Investing
- Hedge Funds 101: Introduction to Hedge Fund Investing
- Variable Annuity Contracts Explained
- Convertible Securities Definition and Types
- Ex-Dividend Date and Record Date Explained
- What Is Day Trading?