What is a Session Price?
The term session price refers to the price of a stock over the entire trading session, which is a variable period of time. The session price is also sometimes referred to as the final price at the close of the session. Daily price data for a trading instrument usually includes the opening price, the high price, the low price, and the closing price as well.
- The session price is the price of a stock during a trading session.
- It can also be used to describe the final price for a security at the end of the trading day.
- Historical prices generally list each session price of each day.
- Session prices can also refer to many other prices in a given period, depending on the context.
Understanding Session Price
A stock's current or market value is determined by its price. This is the amount at which a company's stock trades per share at any given point. It is determined when a buyer and seller come together and agree upon a price at which to make a trade. When there are more buyers than sellers, the price rises, and when there are more sellers than buyers, the price drops.
There are several components to a stock price:
- The opening price or the first price of a security at the beginning of the trading day.
- The high and low price
- The closing price or the price of a stock at the end of the trading session
As noted above, the session price for a stock is the price at which it trades during the trading session. It may also refer to the closing price for a stock—the stock's price at the end of the day. The session price is a handy way to make determinations on how stocks are moving. They can also help analysts make assessments on current and future performance. For instance, a stock's session price can be used to establish areas where there is support or resistance. It can also be used to identify overreaching trends across the market.
You can use the session price to establish areas of support or resistance and to identify overreaching trends across the market.
Since the session is not a standard unit of measurement, the term session price usually indicates the session to which it refers. For instance, the term can be stated as the opening session price or the range of the session price. A session price may also indicate the price over a day, a week, a month, or any other indicated time frame. One may also see it used in descriptive instances by saying the session price was volatile, or the session price remained stable throughout the trading period.
The New York Stock Exchange (NYSE) has standard trading hours, which are 9:30 a.m. to 4 p.m., EST. The first trade of the day sets the opening price and the final trade will set the closing price. There are after-hours trades that can be made, but they can only be executed through electronic communication networks (ECNs). These after-hour trades are separated into two markets.
The pre-market trades take place between 4:00 a.m. and 9:30 a.m. The after-hours market trades take place from 4:00 p.m. to 8:00 p.m. These trades tend to have more volatility and less liquidity than the ones that take place during standard business hours. This is probably since trades that take place during these hours are considered unusual, and are potentially occurring due to outside factors and influences that may falsely inflate or deflate some prices.
There are many reasons why an investor may choose to trade outside of the standard operating hours of the NYSE. For some, it may be the only time they have available. For others, there may be a market change that they are trying to get ahead of, or conversely, take advantage of. Whatever the reason may be, the market may revert to the prior day’s standard session prices, as opposed to the prices that were in effect during the alternative sessions, once the standard operating hours begin again.