What is closing price?
The closing price of a stock is the price at which shares close at the end of trading hours of the stock market. In other words, the closing price is the weighted average of all prices during the last 30 minutes of the trading hours on NSE and BSE; it is often confused with LTP (Last Traded Price).
What is adjusted closing price?
Adjusted closing price is the closing price of a stock that’s updated to reflect its value after accounting for corporate actions like dividends, stock splits, bonus issues, rights issues, and mergers. It is considered a more accurate reflection of a stock’s value.
Closing price vs Adjusted closing price
| Closing price | Adjusted closing price | |
| Purpose | Shows the market price on a specific day. | Shows the stock’s real growth and return over time. |
| Impact of corporate action | Remains unchanged even if dividends or splits occur. | Adjusted automatically to maintain the true value after dividends, bonuses, or splits. |
| Price fluctuation | Prices may alter daily based on market activity. | Price changes only when a corporate event affects the stock. |
| Example | If the weighted average is ₹1,000, then that is the closing price | If a 1:1 bonus is issued, the adjusted closing price becomes ₹500 for past data. |
Trading Session Timeline
- Daily market hours: 9:15 AM – 3:30 PM
- Closing price calculation window: 3:00 PM – 3:30 PM
Closing price formula
Closing Price = Sum of (Trade Price × Volume) / Total Volume Traded
Example:
| Time | Trade Price (₹) | Volume | Price × Volume |
| 3.05 | 100 | 200 | 20,000 |
| 3.15 | 102 | 100 | 10,200 |
| 3.25 | 101 | 300 | 30,300 |
| Total | 600 | 60,500 |
Closing Price = 60,500 ÷ 600 = ₹100.83
Note: If no shares of that particular stock are traded in the last 30 minutes of the market, then the LTP becomes the closing price.
Why this method is used?
- Avoids manipulation by last-minute trades.
- Reflects fair market value at session end.
- Ensures consistency for settlement, NAVs, and reporting.
Why is the opening price different from previous day’s closing price?
A stock’s closing price is determined by the stock’s trading in the last 30 minutes, while the opening price is decided by the fresh orders in the pre-open session.
Overnight news, global market trends, or company announcements can shift investor sentiment, causing the stock to open higher or lower than its previous closing price.
