Open and Close (Trading)

Open and close are paired trading terms with two related meanings. First, a trader opens a position when they make the trade that creates it, such as buying shares or selling a futures contract short, and closes it with the offsetting trade that ends it. Second, the open and close are the first and last traded prices of a session or period, such as a trading day, which together with the high and low form the "OHLC" data behind price charts.

Both meanings are used across stock, futures, foreign exchange and crypto markets, but they work differently where markets never shut. Stock exchanges have fixed hours and formal opening and closing auctions; currency markets trade round the clock on weekdays; and crypto markets trade 24/7/365, so their daily "open" and "close" are conventions, most often midnight in Coordinated Universal Time (UTC).

Opening and closing a position is like checking in and out of a hotel. Checking in starts the stay and your bill; checking out ends it, and only then do you know exactly what the stay cost. A trade is the same: the profit or loss is only "realised" when the position is closed.

Open and close prices are more like the first and last reading on a shop's till each day. A shop that opens at nine and shuts at six has obvious first and last sales. A petrol station that never closes has to pick a moment, say midnight, and call that the end of one day and the start of the next. Crypto markets are the petrol station.

A long position is opened with a buy and closed with a sell; a short position is opened with a sell and closed with a buy. In options trading the four combinations have names: buy to open, sell to open, buy to close and sell to close, because the same buy or sell can either create or extinguish a contract. In futures markets, open interest counts contracts that have been opened and not yet closed, and it rises or falls as new positions are created or offset.

Profit or loss on a long position, ignoring fees and financing, is:

• $P_{\text{open}}$ is the price at which the position was opened.
• $P_{\text{close}}$ is the price at which it was closed.
• $Q$ is the quantity held.

A trader who opens a long position of 2 ETH at 3,000 USDT and closes it at 3,150 realises $(3{,}150 - 3{,}000) \times 2 = 300$ USDT before fees. For a short position the sign is reversed. Until the close, gains and losses are unrealised and are tracked by mark-to-market valuation; on margined positions a fall in that value can force an early close through a margin call or forced liquidation. Positions are usually closed with a market order, a limit order or a stop-loss order.

On the New York Stock Exchange the core session runs from 9:30 a.m. to 4:00 p.m. Eastern Time. Most large exchanges set their official opening and closing prices through auctions, which gather orders and match them at a single price. The closing price carries particular weight: index providers, exchange-traded funds and mutual funds use it to value holdings, so a large share of a day's trading volume is often concentrated in the closing auction. The gap between one day's close and the next day's open captures news released while the market was shut.

The FX market trades continuously from Sunday evening to Friday evening, New York time. By widespread convention the FX trading day ends at 5:00 p.m. New York time, which is when daily candles close and overnight rollover is applied on many platforms. Benchmark fixes, such as the 4 p.m. London rate widely used to value portfolios, serve as reference "closes" for particular purposes.

Crypto markets have no closing bell. Data providers and most centralized exchanges draw daily candles from 00:00 to 23:59:59 UTC, so the "daily close" for Bitcoin (BTC) is usually its price at midnight UTC. Some platforms let users switch charts to local time zones, so "the close" can differ between sources by several hours, and percentage changes may be measured over a rolling 24 hours rather than a calendar day. Regulated bitcoin futures and exchange-traded products often use their own reference rates, calculated at fixed times from several exchanges' trades. Weekly and monthly closes follow the same UTC convention and are closely watched by chart-based traders, for example when tracking bull markets, bear markets or signals such as the golden cross.

Open and close prices feed candlestick charts, daily returns, year-to-date performance and indicators such as the Relative Strength Index (RSI). Their limitation is that they are snapshots. A single large trade near the cut-off can move a thinly traded closing price, which is why manipulation of closing prices ("marking the close") is prohibited in regulated markets, and why careful analysts state the time zone used for any crypto open or close they quote.

• NYSE: Holidays and Trading Hours
• NYSE: Opening and Closing Auctions Fact Sheet