Close Period

DEFINITION of 'Close Period'

The time period between the completion of a listed company's financial results and the announcing of these results to the public. The close period is typically regarded as the one-month period preceding the release of a company's quarterly results, and the two-month period before the release of its annual results.

BREAKING DOWN 'Close Period'

The close period is intended to prevent trading in a company's shares by its insiders ahead of the public dissemination of its financial results. This is because the insiders may be privy to information that is not yet in the public domain, and may be tempted to "jump the gun" with regard to their company shareholdings.


For example, if a company has unexpectedly had a disastrous quarter, its shares may be expected to plunge once the financial results are released. A corporate insider who sells some or all of his or her shares in the company before the news is released to the general public would be subject to severe sanctions from the regulators, including disgorgement of profits if any, fines and even incarceration in extreme cases.

RELATED TERMS
  1. Insider Information

    A non-public fact regarding the plans or condition of a publicly ...
  2. Insider Buying

    The purchase of shares of stock in a corporation by someone who ...
  3. Insider

    A director or senior officer of a company, as well as any person ...
  4. Earnings Call

    A conference call between the management of a public company, ...
  5. Earnings Announcement

    An official public statement of a company's profitability for ...
  6. Public Company

    A company that has issued securities through an initial public ...
Related Articles
  1. Investing

    Conference Calls: Press 1 For Investment Insight

    These calls can be an investor's most direct line to information about a company's operations.
  2. Investing

    When Insiders Buy, Should Investors Join Them?

    Insider tracking can inform your investment strategy, but it requires research and a level head. Find out what to look for.
  3. Investing

    What is a Public Company?

    A public company has sold stock to the public through an initial public offering (IPO) and that stock is currently traded on a public stock exchange.
  4. Investing

    The Ups And Downs Of Initial Public Offerings

    Initial public offerings aren't the best option for every company. Consider these factors before "going public."
  5. Personal Finance

    Buy Stock With Insiders: How To Track Insider Buying

    Insider buying can be a sign that a company's stock prices will soon rise. Here's how to keep track of insider buying on public databases and websites.
  6. Markets

    How The SEC Tracks Insider Trading

    We look at how the SEC tracks and tries to stop insider trading - a seemingly impossible task.
  7. Markets

    Insider Selling Isn't Always A Bad Sign

    Predated trades at regular intervals can instill confidence, not fear, for investors.
  8. Trading

    Keeping An Eye On The Activities Of Insiders And Institutions

    These transactions reveal much about a stock. We go over what to consider and where to find it.
  9. Markets

    The Flow Of Company Information

    Learn how to gather all the pieces before you start to put together your puzzle.
  10. Markets

    Delving Into Insider Investments

    Keeping tabs on company executives can provide clues about where a stock is headed.
RELATED FAQS
  1. What's the difference between insider trading and insider information?

    Learn about insider information and insider trading and the differences between the two; both involve nonpublic information ... Read Answer >>
  2. What is an IPO lock-up period and how long is it?

    An initial public offering (IPO) lock-up period is a contractual restriction that prevents insiders who are holding a company's ... Read Answer >>
  3. What are the advantages and disadvantages for a company going public?

    An initial public offering (IPO) is the first sale of stock by a company. Small companies looking to further the growth of ... Read Answer >>
  4. How often should I measure my company's key performance metrics (KPIs)?

    Learn the definition of illegal insider trading while reviewing the people who can be involved and the regulations and consequences ... Read Answer >>
  5. What exactly is insider trading?

    An "insider" is any person who possesses at least one of the following: 1) access to valuable non-public information about ... Read Answer >>
  6. What is a quarterly report?

    Learn about quarterly reports and why they are important to investors. Explore street consensus estimates and how reported ... Read Answer >>
Trading Center