What is an Opening Price?

In the stock markets, opening price refers to the price of a security at the beginning of the trading day.

How Does an Opening Price Work?

The New York Stock Exchange has the most famous opening bell. At 9:30 am Eastern time, it rings. At that time, the last trading price for each security on the exchange the day before (the closing price) becomes the opening price, or the open.

For example, if Company XYZ's stock was $4 per share at the end of the trading day yesterday, its opening price will likely be $4 when the exchange opens today (although overnight trading on other exchanges might affect the opening price).

Why Does an Opening Price Matter?

The open is the start of a new day, though it is important to note that that doesn't necessarily mean trading hasn't been going on right before the open. After-hours markets remain open as do other exchanges in other countries and time zones, which provides opportunity for the price to change right up until the open in many cases.