Market Close denotes the cessation of regular trading activity on a financial exchange at a predetermined time. In traditional markets, this signifies the end of continuous trading for the day. For 24/7 crypto markets, “market close” typically pertains to the settlement or expiry of specific derivatives contracts or the daily accounting period of certain institutional platforms.
Mechanism
For traditional exchanges, the market close often involves a closing auction mechanism to determine a single closing price, matching residual orders. In the crypto context, while spot markets are continuous, “market close” applies to specific contract expiries, such as daily or weekly options and futures, where settlement prices are determined, and positions are cash-settled or physically delivered.
Methodology
The strategic methodology around market close involves managing open positions, executing final adjustments, and calculating end-of-day valuations. Traders may use algorithms to ensure orders are completed by this specific time to influence closing prices, manage margin requirements, or reconcile portfolios. This period is crucial for risk management and financial reporting accuracy.
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