Market Close: The Most Important Price Of The Day

Nasdaq490 FollowersFollow5ShareSavePlay(12min)CommentsSummaryThe official market close is undeniably the most important trade of the day. It determines stock and index returns. It is used for futures and options settlements, mutual fund cash flows and ETF creations and redemptions.It is also used to determine the volatility of stocks, the tracking error of index funds and the outperformance (or alpha) of portfolio managers.Because the close price is critically important to so many traders, the close is also usually the largest single trade of the day.Thus, investors and issuers care about the close (a lot!). They prefer it to be predictable and stable - reducing, rather than adding, to trading costs. da-kuk/E+ via Getty Images By Phil Mackintosh, Nasdaq Chief Economist The official close is undeniably the most important trade of the day. It determines stock and index returns. It is used for futures and options settlements, mutual fund cash flows andThis article was written byNasdaq490 FollowersFollowNasdaq (Nasdaq: NDAQ) is a leading global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators as they navigate and interact with the global capital markets and the broader financial system. We aspire to deliver world-leading platforms that improve the liquidity, transparency, and integrity of the global economy. Our diverse offering of data, analytics, software, exchange capabilities, and client-centric services enables clients to optimize and execute their business vision with confidence.