What is the 'Opening Bell'?

The opening bell is rung on the trading floor to signify the start of the day’s trading session. Since 1985, the New York Stock Exchange (NYSE) has used the opening bell to start its trading session at 9:30 a.m. Eastern Time. Opening bells ensure order in a marketplace by ensuring that no trades occur before the opening or after the close.

BREAKING DOWN 'Opening Bell'

Physical trading floors have become less common over the years with the rise of electronic trading. Most traders use the term opening bell to describe the opening of a given market. The physical ringing of the opening bell has become a ceremonious event where dignitaries visiting the stock markets or companies that are trading for the first day are given the honor of ringing the bell.

The first bell was a Chinese gong. However, in 1903, the gong was replaced by an electronically operated brass bell. The bell is accompanied by the gavel that is used in conjunction with the closing bell in recognition of 19th-century stock calls. The opening and closing bell can be viewed each day on the The New York Stock Exchange’s website.

Before the Opening Bell

Many exchanges offer pre-market trading that occurs before the opening bell. During this time, traders and investors may place trades based on news that is released overnight or before the opening bell and the start of the trading session.

While pre-market trading has its advantages, there are several important risk factors. Pre-market trading tends to have less liquidity than trading during regular hours, which means that bid-ask spreads may be wider and price action may be significantly more volatile. Many pre-market and after-hours traders are also institutional investors trading in mutual funds and hedge funds, which means that retail investors must compete with professionals.

Opening Bell Times

The New York Stock Exchange opens at 9:30 a.m. Eastern Time and closes at 4:00 p.m. Eastern Time, but different exchanges open at different times of the day. For example, many futures markets have an opening bell followed by a morning and afternoon session. The options markets also tend to have different opening bells depending on the exchange. Traders should be aware of these times before trading in the market.

In the foreign exchange (forex) market, there is no opening bell since the market operates 24-hours a day, six days per week. The start of the trading day, however, is often considered to be 5:00 p.m. Eastern Time until the same time the next day.

 

RELATED TERMS
  1. Closing Bell

    The sounding of the closing bell brings a trading session to ...
  2. New York Stock Exchange - NYSE

    The New York Stock Exchange, located in New York City, is considered ...
  3. Close

    The close is the end of a trading session in financial markets, ...
  4. Baby Bells

    The Baby Bells were the U.S. regional telephone companies that ...
  5. Extended Trading

    Extended trading is trading conducted by electronic exchanges ...
  6. Opening Cross

    Opening cross is a method used by Nasdaq to determine the opening ...
Related Articles
  1. Trading

    The Tradition Of The NYSE Bell

    Ringing the NYSE bell has become a time-honored tradition that has included many celebrities, athletes and notable personalities.
  2. Trading

    Rise and Shine With This Pre-Market Checklist

    Your pre-market routine sets the stage for the rest of the trading day. Use this comprehensive checklist to get up to speed ahead of the opening bell.
  3. Trading

    Trading in the Pre- and Post-Market Sessions

    Pre-market and after-hours trading may offer benefits for traders, but there are some potential problems.
  4. Investing

    How to Predict Where the Market Will Open

    Find out how some indicators help investors predict the likely opening direction of stocks. Also, determine how international markets influence the open.
  5. Trading

    Intro to Open Interest in the Futures Market

    Learn about open interest, a concept used to confirm trends and trend reversals for futures and options contracts.
  6. Investing

    The Opening Cross: How Nasdaq Stock Prices Are Set

    Learn how the opening cross auction process determines prices of Nasdaq-listed securities at market open to ensure liquidity by matching buyers or sellers.
  7. Insights

    The Cost of Buying a Taco Bell Franchise (YUM)

    A Taco Bell franchise is one of the most expensive to buy and operate in the fast food business.
  8. Trading

    The Death Of The Trading Floor

    Electronic trading has almost completely replaced face-to-face human trading.
  9. Trading

    Eight Factors That Affect Daily Trades

    Find out which factors can help you squeeze more profit out of each position.
  10. Investing

    Using Open Interest to Find Bull/Bear Signals

    Volume should inform your use of this indicator in confirming trends and reversals.
RELATED FAQS
  1. What is the history behind the opening and closing bells on the NYSE?

    Similar to school bells, the New York Stock Exchange's (NYSE) opening and closing bells mark the beginning and the end of ... Read Answer >>
  2. What does "after the bell" mean?

    "After the bell" is financial slang for activity occurring after the close of the stock market, including after-hours trading, ... Read Answer >>
  3. Trading hours of world's major stock exchanges

    Learn about stock exchange trading hours, the opening and closing times of some major global stock market exchanges, and ... Read Answer >>
  4. Why are Traders on the Floor of the Exchange?

    Learn how trading on the floor of the stock exchange has evolved over time with computers now managing the majority of buying, ... Read Answer >>
  5. What is the difference between open interest and volume?

    Learn how to interpret the relationships between price, volume and open interest in the options and futures markets. Read Answer >>
  6. What does high open interest tell you about an option?

    Learn about the open interest of options contracts and what a high and a low open interest indicate about the liquidity of ... Read Answer >>
Trading Center