Knowing the exact number of trading days in a year is one of the essentials of stock trading. But, unfortunately, many casual traders aren’t aware of it. Furthermore, some traders don’t even know you couldn’t trade on weekends, for example. But knowing how many trading days there are in a year is essential for a few reasons. First, knowing the number of trading days will help you formulate a better trading strategy. Secondly, the number of trading days and their dates will help you better analyze market trends. But most importantly, the knowledge will help you make informed decisions that could heavily affect the investment outcome.
That’s precisely why we’re writing this guide. Eager traders should familiarize themselves with the stock market as much as possible to ensure a successful outcome. Since we’re here to educate our readers, let’s answer the question.
How Many Trading Days in 2023?
The number of trading days in 2023 is 250. But why this number specifically? The number varies from year to year. But in most cases, it ranges between 250 and 253. So there’s a three-day leeway depending on several factors. But before we tell you about the factors, we must first look at the concept of a “trading day.”
What Is a Trading Day?
A trading day is a day when financial markets are open for business. During a trading day, traders can buy, sell, or exchange financial assets such as stocks, bonds, and currencies. Trading days typically last from the opening bell at 9:30 am Eastern Time (ET) to the closing bell at 4:00 pm ET, with a break for lunch from 12:00 pm to 1:00 pm ET.
Trading days are Monday to Friday, but as mentioned previously, there are exceptions to the rule. Namely, if a major holiday or similar event falls on a weekday, the stock market will be closed that day. This is precisely why there are ~250 trading days instead of the 260 workdays we generally have in a year.
How Are Trading Days Determined in the United States?
NASDAQ and The New York Stock Exchange (NYSE) are the two main exchanges in the United States. They follow a standard schedule for trading days, typically Monday to Friday, except for major holidays. The Securities and Exchange Commission (SEC) oversees the stock market and approves the trading schedules for both exchanges.
What Factors Determine the Trading Days in a Year?
Several factors determine the number of trading days in a year. These factors include weekends, major holidays, and leap year. So, let’s take a look at each:
Trading does not occur on federal holidays. The United States has nine federal holidays, including:
- New Year’s Day (1st Jan)
- Martin Luther King Jr. Day (3rd Monday of Jan)
- Presidents’ Day (3rd Monday of Feb)
- Good Friday (Friday before Easter Sunday)
- Memorial Day (Last Monday of Jan)
- Independence Day ( 4th July)
- Labor Day (1st Monday of Sep)
- Thanksgiving Day (4th Monday of Nov)
- and Christmas Day (25th Dec)
Trading does not occur on Saturdays or Sundays. This is because the weekends are non-business days for the stock market.
In addition to the federal holidays, the stock market observes major holidays such as Good Friday and Christmas Eve. On these days, trading is either closed early or closed entirely.
Leap years happen every four years, with a leap year having 366 days instead of 365 days. Since the stock market generally operates 252 days a year, a leap year will add one more trading day if it falls on a weekday. It will not add a trading day if the first day of the year falls on a weekend, especially Sunday.
What Time of the Trading Day Should You Trade?
Our readers now understand the number of trading days in the year, how they’re determined, and the factors in play. However, there’s much more to learn. For example, we mentioned that experienced traders use the trading days in a year knowledge to formulate strategies.
Namely, even experienced traders don’t trade every day. Moreover, they trade only at specific times of the day. But unfortunately, we cannot tell you what time of the trading day you should trade as it depends on your trading strategy. What we can do is give you general helpful information.
The time of day you trade depends on, most importantly, your trading strategy, market conditions, and risk tolerance. The first and last trading hours are typically the most volatile, while the middle of the day tends to be less volatile. Trading during the lunch hour is also less popular among traders, leading to lower liquidity and wider bid-ask spreads.
Use this knowledge with your trading strategy to determine the best and optimal trading hours of the trading day for maximum profits.
What Are the Riskiest Trading Days?
The riskiest trading days are typically when significant news or economic data is released. These events can cause sudden price movements and increased market and price volatility. Some examples of such events include earnings reports, Federal Reserve meetings, and non-farm payroll reports.
These reports don’t pinpoint specific days of the year; they’re usually random. So you need to be extra vigilant and pay attention to the news to avoid them and, thus, avoid significant risk.
Knowing how many trading days there are in a year is essential for stock traders. Trading days are determined by federal holidays, weekends, major holidays, and leap years. For example, there are 250 trading days in 2023, but the number of trading days for 2024 will be 252. As you can see, this follows the general pattern of the year having between 250 and 253 trading days.
Trading days and hours are equally important investing essentials traders must pay attention to.
There are exactly 250 trading days in 2023.
It depends on the month. But, on average, there are 21 trading days in a month. With that said, Some months can have 19 trading days, like February, and some can have 23 trading days, like March.
There are 52 stock trading weeks in a year. This coincides with a year having 52 weeks, and markets never close for the whole week.