All About Closing Price

The closing price for a stock refers to the closing price at which a share is traded at the close of trading hours on the stock exchange. This is not to be confused by the LTP (last trading price), which is the final price at the stock traded before the markets close.

The closing price, in simple terms, is the average weighted of all prices over the last 30 minutes. The previous trading price, on the other hand, is the price at which the stock closed before the market closes for the day.

What is the closing price?

India has two main stock exchanges: the BSE (formerly Bombay Stock Exchange), and the National Securities Exchange of India, NSE. Both markets close trading around 3:30 PM.

You need to know all prices at which the stock was traded between 3 and 3:30 pm in order to determine its closing price. Here is an example of how to calculate the closing price for stock A.

Stock A shares were trading at Rs. 10 per share Two more shares traded at Rs. 12. One share of stock A traded at Rs. 11. The price jumped to Rs. 3:30 PM Two shares and 20 pence each were traded.

To calculate the closing price, multiply the number shares by the price at that time. At 3:00 PM, the total product equals Rs. 20 (two shares multiplied with Rs. 10, at 3:10 PM, the total is Rs. 24) At 3:20 PM, it is Rs. 11. At 3:30 PM, it's Rs. 40. These values are added to calculate the product total traded over the last 30 minutes: Rs. 95

Divide the product by the number of shares traded in the last 30 minutes to calculate the closing price. Your closing price is Rs 13.57 (Rs. 95/7

The stock's last trading price was Rs 20.

Can the closing price and the last trading price be equal?

As mentioned above, the closing and final trading prices are very different. In some cases, however, the closing price may be the same as the previous trade price.

If there are no shares of a stock traded within the last 30 minutes, the closing price is the price at which the trades were completed.

Let's take the previous example and explain it better. Three shares of stock A were exchanged at Rs 10 at 2 PM. Five shares of stock A were exchanged at Rs 20 at 2:45 PM. The market closes at 3:00 PM.

In this instance, the closing price and last trade price will be Rs 20.

Why closing price is important?

Market watchers will be as concerned about the closing price as they are the opening price. This is the price at the stock opens on the market.

You can use the closing price of a stock as a reference point to help you understand how shares behave. The closing price can be viewed over a period of time. This could include a month, a year or more. This will allow you to determine the stock's performance over time, and help you make informed investments decisions.

Conclusion

Investors are not the only ones who need to know the closing price of stocks. Financial institutions can also monitor closing prices and make decisions. Learn how to analyze the closing price if you want to diversify your investment portfolio.