Why does the stock market close at 4PM when the world is open 24/7?
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Why does the stock market close?
I am sure there are multiple reasons and I am pretty sure I do not know all of them. I think the biggest reason is probably that federal regulations require stock exchanges to maintain an orderly market. That is very difficult to do if the markets are open 24/7. One way some exchanges help maintain an orderly market is to use market makers who trade out of their own accounts and would be very vulnerable to news breaking while they were sleeping. For other people's answer to that question see https://ask.metafilter.com/48695/Why-do-...
Bad weather and major events that are disruptive will cause the markets to stay closed. They also are impacted by other factors, such as if it is after 4:00pm (the end of standard trading hours). There is still after hours trading, I don't know when that closes for the day. Weekends and holidays. A few times in the history of the market, if there is a large enough crash they may close the market for a few days. Sometime huge changes in price can cause the market to close early (usually only the stocks that are impacted stop trading, others would keep trading). Follow the link (New York Stock Exchange) and look at the timeline. It will tell you a few of the historical events that have caused the market to close.
All markets are owned by their members who set the hours of operation. The SEC must approve those hours and days of operation. The NYSE, for example, is owned by members who are resident in the NYC area. The hours of operation fit nicely for someone who must commute to and from uptown Manhattan or western Connecticut. (The Exchange is actually located downtown. Back in the day you could walk from there to the World Trade Center.)
Stock prices constantly change based on the laws of supply and demand.New information doesn't care if the market is closed or not, it just comes out arbitrarily.When new information surfaces that creates an imbalance in supply and demand and traders make transactions on the market until a new balance is found, and the process repeats.Many stocks even move when the market is closed, as traders revalue what a stock is worth to them and transact on that figure, which is why some days stocks open with a gap higher or lower, and it can be significant.The purpose of the market is to facilitate transactions and liquidity between traders, not to value the price of a stock. Value is based on supply and demand, which is then measured by the price on the market.Hope this helps.
The many machines/computers/screens, etc., switches are all connected to those clapper switches. There's a lot of equipment and switches so it requires many to shut operations down. c'mon….lol!The open and close are done with the ringing of an actual brass bell. Its done by various and ever changing honored guests who smile and applaud the event. Its a custom, win. lose or draw for the days trading. I think it celebrates free market trading and the substantial efforts put out for the session.
US commodity markets will tend to close on US holidays if they face little international competition. A concrete example - ICE US will close their agricultural markets on many US holidays (July 4th, Thanksgiving) but keep their financial markets open because European financial markets are open.
Why does the forex market close during the weekends.Why isn't it open 24/7? ?
Huh, right. That's what every Forex beginner hears about the market. They tell you that you can trade Forex and earn money 24/7 - the beauty of currency trading. Yes, you can, IF you keep you look to trade on daily, weekly and monthly basis which means you'll leave your trades open for an extended period of time. No, if you look to trade short-term - be in and out of the market withing several hours or less. Majority of Forex brokers won't provide you an opportunity (in one or another way) to trade: Option #1 - they won't show weekend data on the charts. You can't trade without seeing prices. Option#2 - they won't allow you to open any new orders -the platform won't accept any requests. Option#3 - they will significantly increase spreads, making it unprofitable to open a new order.
As far as I remember.. there are many sub stages when a stock market opens/closes for trade. We as individuals are aware of "open, trade and close". However, stocks or stock markets have pre-opening, trading, pre-close, close and some other intermediary stages as well. These phases are for shorter span and depending on the stock market rules- you may place orders.Since order placing is allowed, the dynamics of the trading come into play - which finally has an impact on share price even during close phase.
The world doesn't stop while the market is closed, trading continues in Asia after North America closes, and then it moves to Europe and then back to North America... once it gets back the indices reflect what happened in the other markets around the world as well as the news that came out during the night that may affect the stocks included in those indices.