Closing Price: What is Closing Price? | Angel One (2024)

The closing price of a stock is the price at which the share closes at the end of trading hours of the stock market. It is not to be confused with the last trading price or LTP, which is the final price at which the stock was traded before the markets closed.

In simple terms, the closing price is the weighted average of all prices during the last 30 minutes of the trading hours. Whereas the previous trading price is the final price at which the stock was traded before the market closed for the day.

How is the closing price calculated?

There are two primary stock markets in India—BSE (formerly Bombay Stock Exchange) and National Securities Exchange of India (NSE). Both markets close trading at 3:30 PM.

To know the closing price of a stock, you need to know all the prices at which it was traded between 3 PM and 3:30 PM. Here’s an example for calculating the closing price of stock A.

At 3 PM, the two shares of stock A were traded at Rs. 10 a share. At 3:10 PM, two more shares were traded at Rs. 12. At 3:20 PM one share of stock A was trading at Rs. 11. At 3:30 PM the price went up to Rs. 20 a share and two shares were traded.

Now to calculate the closing price, first multiply the number of shares to the price at the particular time. So, at 3 PM the total product is Rs. 20 (two shares multiplied by Rs. 10), at 3:10 PM the total is Rs. 24, at 3:20 PM it is Rs. 11 and at 3:30 PM it is Rs. 40. Add these values to find out the total product traded in the last 30 minutes: Rs. 95.

The closing price is calculated by dividing the total product by the total number of shares traded during the 30 minutes. So your closing price is Rs 13.57 (Rs. 95/7).

You last trading price is, however, Rs 20, which is the price at which the stock was traded last.

Can closing price and last trading price be the same?

As explained above, the closing price and last trading price are quite different. However, in one particular instance, the closing price can be the same as the previous trading price.

If no shares of a particular stock are traded in the last 30 minutes of the market, the last trading price becomes the closing price.

Let us retake the previous example to understand it better. At 2 PM, three shares of stock A were traded at Rs 10. At 2:45 PM, five shares of stock A were traded at Rs 20. No more shares are traded until the market closes at 3:30 PM.

In this case, the closing price and last trading price will be Rs 20.

Why is closing price important?

If you are a market watcher, the closing price is as essential for you as the opening price, which is the price at which the stock opens in the market.

The closing price of a stock is a reference point for you to understand how a share behaves. You can study the closing price of price over some time, such as a month or even a year. Doing so will help you determine how well the stock has done over time and make an informed investment decision.

Conclusion

The closing price of stocks is essential not just to investors. Financial institutions also observe closing prices and make policy decisions. If you are planning to diversify your investment portfolio, learn to analyse the closing price and reap the rewards.

Closing Price: What is Closing Price? | Angel One (2024)

FAQs

Closing Price: What is Closing Price? | Angel One? ›

In simple terms, the closing price is the weighted average of all prices during the last 30 minutes of the trading hours. Whereas the previous trading price is the final price at which the stock was traded before the market closed for the day.

What is the closing price? ›

"Closing price" generally refers to the last price at which a stock trades during a regular trading session. For many U.S. markets, regular trading sessions run from 9:30 a.m. to 4:00 p.m. Eastern Time.

What is the last price and closing price? ›

The Last Traded Price (LTP) is the actual last traded price on the exchange. The Closing Price is the weighted average price of a stock of the last 30 minutes of trading.

What is a closing value? ›

: the price of a stock or bond at the end of a day.

What is the formula for closing price? ›

Closing Price is equal to weighted average price of all trades done during the last 30 minutes of a trading day. If the number of trades during last 30 minutes are less than 10, then it is based on the weighted average price of the last 10 trades executed during the day.

What is the opening price and closing price? ›

The listed closing price is the last price anyone paid for a share of that stock during the business hours of the exchange where the stock trades. The opening price is the price from the first transaction of a business day.

What is the Bid Price and closing price? ›

While the bid price focuses on the highest price a trader is prepared to pay to go long (buy) on an asset and the ask price is the lowest price a trader is prepared to short (sell) an asset, the last price is essentially the value of the most recent transaction of said asset.

How important is the closing price? ›

It can help confirm trading signals.

Many technical traders use closing prices to confirm or invalidate trading signals. For example, a trader may only enter a long position (buy the stock) if the closing price is above a resistance level, and exit the position if the closing price falls below a support level.

When you sell stock, do you get the closing price? ›

You will get the share value at the time you sold, not the price at end of day. The OP may be confused between the time that he called his broker and ordered the broker to sell (or the time that he clicked "Sell" on the broker's web site, the time that the order was placed, and the time that the sale actually occurred.

What is the difference between typical price and closing price? ›

Some investors use the Typical Price rather than the closing price when creating moving-average penetration systems. The Typical Price is a building block of the Money Flow Index. Typical Price is calculated by adding the high, low, and closing prices together, and then dividing by three.

What is the last price? ›

The last price represents the price that was calculated last. As a rule, this is a price at which an order has been executed, i.e. a transaction has been made.

Is high closing price good? ›

Traders attempt to make small trades at high prices during the last few minutes before the market is closed to leave an impression that the stock's performed well. The high close strategy's been criticized for its market manipulation purpose, and the abuse of the strategy can lead to legal issues.

What is a good closing rate? ›

A general rule of thumb is that a sales closing ratio of 20% is considered average, while a 30% or higher ratio is considered best in class.

What is the last close price? ›

The market price for the share at the end of the last day of trading.

How to determine closing price? ›

In simple terms, the closing price is the weighted average of all prices during the last 30 minutes of the trading hours. Whereas the previous trading price is the final price at which the stock was traded before the market closed for the day.

What is the difference between the closing price and the last price? ›

The closing price is the final valuation of a security during regular trading hours, while the last traded price (LTP) is taken from the last transaction involving a particular security. One would think they should be the same if you're looking up the price of a stock after hours, but that's not always the case.

What is calculated closing price? ›

Closing price = Total Trading Value / Total Volume.

By following these steps, the closing price of a security can be accurately calculated based on the weighted average of trade prices during the final 30 minutes of the trading session.

What is the closing rate? ›

A sales rep's closing rate is the number of deals they won compared against the total number of sales opportunities or deals they handled in a specific time period.

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