Whether you’re a day trader or a long-term investor, there’s one constant to being successful. Understanding trading days.
No matter the global stock exchange you invest in, it won’t be open 24/7 or 365 days a year. You must always consider weekends, holidays, half-days, and other special circumstances.
Understanding what time exchanges open and close, mainly how many trading days you have in a year, can be integral to your decision-making and investment strategy.
What is a Trading Day?
A trading day is when the market is actively open and trading. At the end of the trading day, all trading concludes until the start of the next trading day.
Most stock exchanges have trading days, Monday to Friday, but hours can vary from country to country. For instance, the NYSE’s regular trading hours occur from 9:30 am to 4:00 pm, while The London Stock Exchange’s occur from 8:00 am to 4:30 pm. On the other hand, some Asian markets close earlier and also have a lunch break. The Shanghai Stock Exchange, for instance, is open for only a total of 4 hours per day.
How Many Trading Days are in a Year?
The number of trading days in a year varies country by country. For instance, the NYSE and London Stock Exchange can have 251-253 trading days. In contrast, the Hong Kong Stock Exchange, Shanghai Stock Exchange, and Tokyo Stock Exchange have roughly 246 trading days.
What Causes Trading Days to Fluctuate?
If you’re confused as to why trading days can fluctuate year by year, it’s understandable. Why, if there’s a concrete number of days in a year, do trading days change year by year and by country?
The straightforward answer depends on weekends, holidays, national events of significance, and leap years.
We will discuss how these factors can affect trading days regardless of which worldwide exchange you trade.
Stock exchanges close on weekends, but there can be a different amount of weekend days in a year. There can be as few as 104 weekend days in a year or as many as 106 if the year starts on a Saturday.
Market holidays vary from country to country. For instance, the U.S. has nine different market holidays. If a holiday falls on a weekend, the market will close either the Friday before or the Monday after.
- New Year’s Day- January 1st
- Martin Luther King, Jr Day- Third Monday of January
- Presidents’ Day- Third Monday in February)
- Good Friday- Friday before Easter Sunday
- Memorial Day- Last Monday of May
- Independence Day- July 4th
- Labor Day- First Monday in September
- Thanksgiving Day- Fourth Thursday of November
- Christmas Day- December 25th
A market like China, however, has considerably different market holidays that last longer and occur at other times of the year. The only market holiday China shares with the U.S. is New Year’s Day.
- New Year’s Day – January 1st
- Chinese New Year – February 11th-12th and 15th-17th
- Qingming Festival – April 5th
- Labor Day – May 3rd-5th
- Dragon Boat Festival – June 14th
- Mid-Autumn Festival – September 21st
- National Day – October 1st and 4th-6th
Stock exchanges sometimes close in response to major unanticipated events of national significance.
For example, U.S. markets closed in 2018 following former president George H.W. Bush’s passing.
In 2022, countries like Russia, the UAE, and U.K., closed their markets due to major national events. Russi closed the Moscow Stock Exchange for roughly a month following its invasion of Ukraine. The United Arab Emirates closed its exchanges for three days following the death of the UAE’s second president, Sheikh Khalifa bin Zayed. The London Stock Exchange closed for Queen Elizabeth's funeral.
Leap years occur every four years when February adds an extra day. However, markets only add a trading day during a leap year if the leap day falls on a weekday. If a leap day occurs on the weekend, especially Saturday, it won’t affect anything.
The Key Takeaway
Often, investors overlook and take for granted the number of trading days in a year. Yet understanding what days the market is open and closed, as well as market hours, is crucial. Comprehending trading days, and knowing how many trading days there are in a year, can serve as a valuable foundation for a well-rounded strategy. Significantly if investing in different international markets.
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