CompanyGraph
Records the prior session's final price, providing the baseline from which the current session's price change and percentage move are measured.
Previous close is the closing price from the prior trading period. It serves as a reference point for calculating daily price changes.
Previous close is the closing price from the prior trading session, serving as the reference point for calculating the current day's price change. This standardised baseline enables comparison of daily performance and calculating percentage gains or losses. The gap between previous close and current open reveals overnight sentiment shifts.
Why previous close matters:
- Daily change calculation: Current Price - Previous Close = Daily Change
- Percentage change: (Current - Previous) / Previous × 100 = % Change
- Gap analysis: Open vs. previous close shows overnight movement
- Quote display: Financial sites show change from previous close
The daily change calculation:
Previous Close: $50.00 Current Price: $52.50 Dollar Change: +$2.50 Percentage Change: +5.0%
Gap analysis using previous close:
- Gap up: Today's open > Previous close; bullish overnight news
- Gap down: Today's open < Previous close; bearish overnight news
- Gap fill: Price returns to previous close after gapping
Technical analysis applications:
- Support/resistance: Previous close can act as intraday pivot
- Unchanged line: Price at previous close shows no change point
- Relative strength: Performance vs. previous close across securities
Trading considerations:
- After-hours adjustment: Previous close doesn't reflect after-hours trading
- Ex-dividend adjustment: On ex-dividend days, price drops by dividend amount
- Corporate actions: Splits and spin-offs require adjusted comparison
- Intraday traders: Focus on current day relative to previous close
- Daily returns: Close-to-close returns use previous and current close
- Portfolio tracking: Daily P&L calculated from previous close
Adjusted previous close:
For accurate historical analysis, adjusted previous close accounts for dividends, splits, and other corporate actions, enabling valid comparison over time.
Previous close provides the baseline for understanding current price action. Every price quote's change display uses previous close as the reference point for daily performance.