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The closing bell signals the end of the trading session on a stock exchange, ensuring all traders stop simultaneously. It is often used metaphorically to refer to the end of a business day. The New York Stock Exchange still uses a bell to signal the start and stop of trading.
On a stock exchange, the closing bell is a signal that the trading session for the day has ended and that all traders in the room must stop trading until a new session is reopened. It is often used metaphorically to refer to the end of a business day. Not all stock exchanges specifically use a bell to signal the end of daily trading, but the term is fairly universally understood in the financial world. On stock exchanges that still use a bell to signal the end of the trading day, an opening bell is also rung at the beginning of the day to indicate that the stock exchange is open for business.
The floor of a stock exchange can sometimes get extremely chaotic, especially when the market is in wild swings. Using a strong signal such as the closing bell ensures that all operators stop doing business simultaneously. When a financial market heats up, doing business after the close of the day could become to the trader’s advantage, if he or she can get away with it. Usually, a warning bell is rung before the closing bell, to alert traders to the fact that the market is about to close.
In cases where a physical closing bell is not used, other loud noises or flashing lights are used to attract the attention of merchants. Monitors on the floor are supposed to keep an eye out for traders who might be trying to close last-minute deals after trading for the day has ceased. Once trading for the day has stopped, traders generally still need to file documents and take care of other administrative tasks to ensure they are ready for the opening bell the next day. On Fridays, when the closing bell signals the start of a weekend, the mood in the flat can turn jubilant when the closing bell rings.
The New York Stock Exchange, one of the most famous stock exchanges in the world, still uses a bell to signal the start and stop of trading. American radio and television programs that focus on investments often use the term “closing bell” to refer to the end of the trading day, and some programs that offer daily summaries of investment information are called for some variation on ” closing bell. Ringing the closing bell at the New York Stock Exchange is considered a great honor, and it is not unusual to see a politician or other notable figure symbolically closing the trading day.
Smart Asset.
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