In stock-market analysis, what does a stock's closing price represent?
Answer
Last traded price of the session
In stock-market analysis, a stock’s closing price represents the last traded price of the regular trading session.
The closing price is used in newspapers, financial websites, historical databases, and many price charts. It provides a standardized reference point for comparing one trading day with the next. A daily percentage change is commonly calculated from one closing price to another, although the exact comparison convention can vary.
The closing price is not necessarily the day’s highest, lowest, or average price. It also differs from an adjusted closing price, which data services may calculate to account for events such as cash dividends or stock splits so that historical returns are more comparable.
Modern exchanges may determine an official close through a closing auction rather than a single ordinary trade. The precise rule depends on the venue, but the basic idea remains the session-ending reference price. After-hours trading can produce later prices that are not the regular-session close.