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DEFINITION of 'Previous Close'

A security's closing price on the preceding day of trading. Previous close can refer to the prior day's value of a stock, bond, commodity, futures or option contract, market index, or any other security. By comparing a security's closing price from one day to the next, investors can see how the security's price has changed over time.

BREAKING DOWN 'Previous Close'

A stock's previous close is factored into the information displayed on the ticker tape. An up or down arrow shows whether the stock's current price is higher or lower than its previous close, and the change amount following the arrow shows the size of the price difference. A significant change from the previous close can usually indicate major news about the company, such as an acquisition, change in management or a declaration of bankruptcy.

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    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  3. What does a futures contract cost?

    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
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    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>
  5. How can an investor profit from a fall in the utilities sector?

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