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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RELATED FAQS
  1. How to calculate a stock's adjusted closing price

    When the day's trading is done, all stocks are priced at close. The adjusted closing price accounts for any distribution ... Read Answer >>
  2. Common examples of marketable securities

    Learn about marketable securities and the most common types of debt and equity securities, including common stock, bonds ... Read Answer >>
  3. Does working capital include marketable securities?

    Learn how marketable securities such as Treasury bills (T-bills) and commercial papers are part of current assets and the ... Read Answer >>
  4. Why don't stocks begin trading at the previous day's closing price?

    Between the closing bell and the next opening bell, a number of factors can affect the attractiveness of a particular stock ... Read Answer >>
  5. Does the closing price have to equal the last price traded?

    Logically and theoretically, the last price traded should be the same as the closing price of a stock. However, the way we ... Read Answer >>
  6. What is the difference between options and futures?

    An option gives a buyer the right, but not the obligation to buy or sell an asset, A futures contract obligates the buyer ... Read Answer >>
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