Why is the market price higher than the closing price of a stock?

Question

An ETF I'm looking at closed today on Friday at $76.60 a share. If I buy that stock at market rate, it comes up to be 78.50. Why is the market value so much higher for a given stock than the closing price? If after hours trading has affected the price, how can I keep track of those fluxuations? All the stock trackers I have only deal with times the US market is open. Thanks

Common Sense: For such a "basic" question, you somehow managed to not answer whatsoever. Perhaps next time you could save the lecture on what other people should and shouldn't be doing on "Yahoo! Answers" and actually answer the question. After all, this isn't "Yahoo! Advice" after all.

Answer 1

You have to consider the spread between the bid price and the ask price. The market maker sells at one price and buys at a lower price. That is how he makes his profit. - but he has to work with what stock is available. In addition to market orders, there are many limit orders. For example, there may be people willing to buy if the stock drops to 76.50 or $76.40. and willing to sell if it rises to $77.00 or $77.50 In after hours trading, the spreads between the bid and the ask price increase because of lower volume. During the regular trading day, stocks with the highest volume tend to have the smallest spreads between the bid and ask price.

Limit orders can be "good for the day" (meaning they expire when the market closes) - or they can be "good until canceled." - Suppose the market maker wants to make 25 cents on every share traded. - After hours, with little trading going on, there may still be somebody with a good until canceled order to sell 100 shares at 78.25, even though the closing price was $76.60. (There also may be people who have good until canceled orders to sell at 80.00 or higher prices) - If you really want 100 shares, the market maker could get them for you for 78.50.

Answer 2

I don't say this to be cruel (but);

You should not be in the stock market. This is too basic a question. The first rule of investing is understand what you're investing in. In this case it's the stock market.

You're question reveals that you don't understand the basic concepts of stock trading. This can cost you dearly. Take some time. Buy a couple of books on investing. It'll be a lot cheaper than what you'll pay in losses.

Start with learning about volume. If a stock that trades 500,000 shares in one day goes up by $2.00 on a 100 share transaction............... it means nothing. Many "after hour" trades are "newbies" that have no idea what they're doing. Bid and ask prices can be completely out of whack.