How Many Trading Days in a Year? [2023]

new york stock exchange hours

Ever wondered how many “traded days in a year” there are and why it matters to traders? The number of trading days plays a crucial role in understanding market dynamics and planning investment strategies. In this blog post, we will delve into the factors that influence the number of trading days in a year, such as weekends, holidays, and leap years, and how trading styles can impact the utilization of these days. We will also explore the relationship between market volatility and trading days in a year.

Short Summary

  • Understanding trading days involves regular and extended trading hours of the NYSE, with typically 252 total days in a year.

  • Weekends and stock market holidays can reduce this number, while leap years or special circumstances may increase it.

  • The riskiest times are after-hours trading from 4 p.m.-8 p.m., October & Mondays. Traders should stay informed to plan their strategies accordingly for 2023, 2024 & beyond.

Understanding Trading Days

MarketMarket CapHours
New York Stock Exchange (NYSE)$24.21 trillionM-F, 9:30 am – 4:00 pm (EDT)
NASDAQ Stock Exchange (NASDAQ)$19.01 trillionM-F, 9:30 am – 4:00 pm (EDT)
Shanghai Stock Exchange (SSE)$7.36 trillionM-F, 9:30 am – 11:30 am,
1:00 pm – 3:00pm (CST)
Tokyo Stock Exchange (JPX)$5.59 trillionM-F, 9:30 am – 11:30 am,
12:30 pm – 3:00pm (JST)

Trading days are the lifeblood of the stock market, dictating when investors can buy and sell stocks. A trading day is any day the stock exchange is open during regular trading hours (RTH) from Monday to Friday. However, there are instances where the market may not open due to public holidays or major events.

The New York Stock Exchange (NYSE) in the US has regular trading hours from 9:30 AM to 4:00 PM Eastern Time. All other times are considered after-hours trading. The market also operates during extended trading hours (ETH) from 4:00 PM to 8:00 PM Eastern Time. Different trading styles, such as day trading, swing trading, and position trading, can impact the number of trading days in a year.

On average, there are 252 trading days in a year, but this number can vary due to weekends and holidays.

What is a trading day?

A trading day is a period of time when the primary trading market is open for business, allowing investors to place orders for securities, such as buy and sell orders. The number of trading days in a year varies, but on average, there are 252 trading days. Stock exchanges, including the NYSE and Nasdaq, have regular trading hours. These hours are 9:30 AM to 4:00 PM Eastern Time.

However, there are also extended trading hours outside of this window, allowing for further trading opportunities. The number of trading days can be affected by holidays and special circumstances, such as shortened trading days due to public holidays or unplanned market closures.

Regular trading hours

The standard trading hours on trading days are between 9:30 AM and 4:00 PM Eastern Time, during which the NYSE and other U.S. exchanges operate. Individuals from varied time zones who wish to trade on the NYSE must do so within the NYSE’s trading day schedule.

Thanks to electronic trading platforms, traders can participate in these exchanges remotely, provided that it is during designated market hours.

Extended trading hours

extended hours trading

Image from fool.com

Extended trading hours refer to the hours preceding or succeeding regular trading hours, providing additional opportunities for trading outside the standard window. For instance, pre-market trading hours are from 8:00 AM to 9:30 AM Eastern Time, while after-hours stock trading occurs between 4:00 PM and 6:30 PM Eastern Time.

Shortened trading days can also occur, typically on public holidays or days scheduled for a state function, such as a state funeral of a head of state, where the market closes at 1:00 PM instead of the usual 4:00 PM.

Calculating the Number of Trading Days

On average, there are 252 trading days in a year, but the actual number can vary due to factors such as weekends and holidays. Leap years also affect the number of trading days, as they add an extra day to the year. However, if a leap year starts on a weekend, such as a Saturday, it does not add an extra trading day, like in 2020, which had 253 trading days.

To calculate the number of trading days in a year, one can use the following formula:

365 days – 104 weekend days – 9 market holidays.

Weekends

Weekends, typically Saturdays and Sundays, play a significant role in determining the number of trading days in a year. The disparity in the number of trading days between different years can be attributed to the varying number of weekend days.

It’s important to keep these non-trading days in mind when planning investments and analyzing market trends.

Stock market holidays

Stock market holidays can greatly impact the number of trading days in a year. Common holidays observed by the stock market include:

HolidayDayDate
New Year’s DayMondayJanuary 2, 2023
Martin Luther King Jr. DayMondayJanuary 16, 2023
Presidents Day (Washington’s Birthday)MondayFebruary 20, 2023
Good Friday, Memorial DayFridayApril 7, 2023
Memorial Day MondayMay 29, 2023
Juneteenth National Independence DayMondayJune 19, 2023
Independence DayTuesdayJuly 4, 2023
Labor DayMondaySeptember 4, 2023
Thanksgiving DayThursdayNovember 23, 2023
Christmas DayMondayDecember 25, 2023

In addition to these holidays, there are also shortened trading days where the market closes early at 1:00 PM Eastern Time and unplanned market closures due to unforeseen events such as natural disasters, political unrest, or other events.

Leap years and other variations

Leap years, which occur every four years and add an extra day to February, can influence the number of trading days in a year. If a leap year begins on a weekend, it does not add an extra trading day.

Furthermore, holidays that fall on weekends can also affect the number of trading days. In such cases, the stock market typically observes the holiday either on the preceding Friday or the following Monday.

Stock Market Holidays: A Closer Look

Stock market holidays are non-weekend events where trading does not occur, with two partial trading days where trading ends early at 1 pm Eastern Time. Common holidays include New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas.

When a holiday falls on a weekend, the stock market typically observes the holiday either on the preceding Friday or the following Monday. It is essential for traders to be aware of these holidays and plan their trading activities accordingly.

Shortened trading days

Shortened trading days are instances when the stock market operates for a reduced amount of time, typically from 9:30 AM to 1:00 PM Eastern Time. Such days usually occur due to holidays or other special circumstances, causing the market to close earlier than usual.

Being aware of these shortened trading days can help traders adjust their strategies and avoid potential losses due to unexpected market closures.

Unplanned market closures

Unplanned market closures refer to days when the stock market closes without prior notice due to unforeseen events, such as natural disasters, political unrest, or other events. These closures can have a significant impact on trading days, causing markets to shut down suddenly and for extended durations.

Traders can stay abreast of current events and vigilantly monitor the markets for any indications of potential disruptions. Additionally, they should have a plan of action should a market close unexpectedly.

Trading Styles and Their Impact on Trading Days

The number of trading days utilized by a trader can vary depending on their trading style. Day traders, for example, trade every day, while swing and position traders do not. Factors such as vacations, family events, illness, or appointments can also hinder trading participation for traders of all styles.

Day trading

Day trading is a trading strategy where traders purchase and sell financial instruments within the same trading day to capitalize on short-term price fluctuations. While day trading can be profitable, it also carries the risk of substantial losses should the market move against the trader.

Market volatility can have a substantial influence on day trading, as it can cause prices to fluctuate swiftly and unpredictably, making it challenging for traders to make profitable trades.

Swing trading

Swing trading is a trading strategy that employs both fundamental and technical analysis to take advantage of significant price movements while avoiding periods of inactivity. Swing trading typically involves holding a position either long or short for more than one trading session, but not for a longer duration than several weeks or a couple of months.

Although swing trading offers traders the opportunity to capitalize on short-term price movements, it also poses the risk of forfeiting potential profits if the market moves in a direction contrary to the trader’s position.

Position trading

Position trading is a trading strategy where traders maintain their positions for a prolonged period, typically ranging from weeks to months, with the intention of gaining profit by recognizing and adhering to an ongoing trend. While position trading offers traders the opportunity to capitalize on long-term trends in the market, potentially yielding higher returns than short-term trading strategies, it can also be hazardous as traders may be exposed to considerable losses if the market moves in opposition to them.

Position trading can decrease the amount of trading days required, as traders do not need to keep a close eye on the market.

Market Volatility and Trading Days

A graph showing the riskiest trading hours and days

Market volatility is an essential factor to consider when trading stocks, as it can influence the risk and potential return of a trade. Certain trading days, such as the first and last day of the month or the days before and after holidays, are known to have higher volatility, which can impact the success of trades on those days.

Riskiest trading hours

The riskiest trading hours are during after-hours trading, which occurs after the close of the U.S. stock exchanges at 4 p.m. through 8 p.m. Eastern Time. Trading during these hours carries risks such as low liquidity, fewer market participants, and price volatility, making it challenging for traders to execute profitable trades.

Additionally, the first and last hour of each trading day are considered riskier due to increased potential for price volatility caused by a lack of liquidity and a reduced number of market participants.

Riskiest trading days

The riskiest trading days are those associated with major economic events or times of high market volatility. Some of the most severe market crashes have taken place in October, making it a notoriously volatile month for trading stocks. Traders have also observed a tendency for the stock market to decline on Mondays.

Most volatile months

October is renowned for being the most volatile month for trading stocks, with an average spread of 8.25% between the S&P 500’s closing high and low. Other months, such as April, May, and June, can also be volatile for trading stocks.

Trading Days in 2023, 2024, and Beyond

Looking ahead, the number of trading days for 2023, 2024, and 2025 have roughly the same number of days, with 252 days in 2023, 251 days in 2024, and 250 days in 2025. However, there may be exceptions for holidays that fall on weekends or other special circumstances that can affect the number of trading days, such as unplanned market closures due to natural disasters, terrorist attacks, or other events.

Summary

In conclusion, understanding the number of trading days and the factors that influence them is essential for traders to make informed decisions and plan their investment strategies effectively. By delving into the intricacies of trading days, such as weekends, holidays, leap years, and trading styles, traders can better navigate the stock market and make the most of the available trading days.

Furthermore, being aware of market volatility and its impact on trading days can help traders adapt their strategies and minimize potential losses. As the stock market continues to evolve, staying informed and being prepared for changes in trading days will be crucial for traders’ success.

Frequently Asked Questions

How many stock trading days in 2023?

2023 will have 250 days of stock trading. This figure is determined based on the number of regular trading days in US Cash Equities and US Equity Options traded on the New York Stock Exchange.

How do you calculate number of trading days?

To calculate the number of trading days, simply count the number of days in your period and subtract weekends and holidays. This will give you the total number of trading days for that period.

Are trading days business days?

Yes, trading days are business days. Trading days refer to when the stock exchanges and other financial markets are open and actively trading securities and commodities for businesses and investors.

Business days are any weekday that is not a public holiday, aligning with the market trading days.

What are the trading days for the stock market?

The stock market is open for trading Monday through Friday from 9:30 a.m. to 4:00 p.m. Eastern time.

Pre-market and after-hours trading is also available on certain days.

How many trading days are in 2023?

2023 will have 250 trading days.

US Cash Equities and US Equity Options traded on the New York Stock Exchange will have 250 trading days in 2023 and 252 trading days in 2024.

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