Q:

What is the purpose of the stock market closing bell?

A:

Quick Answer

The purpose of the stock market closing bell is to mark the opening or closing of the trading session. The bell system has been in operation since 1903. Prior to that, the market used a gong to signify the opening or closing of trading.

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Full Answer

Bells play a crucial role in the orderly operation of the marketplace. They ensure that no trades occur before the bell rings at the beginning of the trading session or after the bells ring at the end of the trading session. The closing bells are located in the four sections of the New York Stock Exchange and are operated remotely from a control panel.

When the bell ringing tradition was first introduced, the exchange's floor managers had the responsibility of ringing the bells. In 1995, the NYSE began regularly inviting special guests to ring the closing bell. The bell-ringer presses a button, and each bell rings simultaneously to signal the beginning or the end of the trading day.

The NYSE operates between 9:30 a.m. and 4:00 p.m. EST Monday through Friday as of 2015. However, after-hours trading makes it possible for traders to trade through the night. Prior to 1999, after-hours trading was an option only available to institutional investors, but modern technology has helped extend this option to individual investors.

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