The point of the day at which the trading day is over is known as Daily Cut-Off. This momentous occasion arrives at 4 p.m. EST, when all stocks must be traded or settled by that time in order to be considered for that day's closing prices. The late afternoon hours leading up to this are typically a flurry of activity as traders and investors alike scramble to finalize their positions before the bell tolls."There are a few reasons why 4 p.m. EST has been designated as daily cut-off time throughout Wall Street history:-1- It gives market participants enough time to digest all of the news and events from that day;2- Secondly, it allows for orderly market closures so everyone knows what prices they're dealing with;3- finally, it minimizes risk by ensuring all trades have been completed before markets officially close.""While some argue that 4 p.m. EST is an arbitrary cutoff point and should be moved earlier or later in the day, most people believe it strikes a good balance between allowing sufficient trading volume without dragging on too long into the night."
