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What is an Opening Bell?

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  • Written By: A. Leverkuhn
  • Edited By: Andrew Jones
  • Last Modified Date: 14 November 2016
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In the financial world, an opening bell is a signal that marks the beginning of a trading day on a stock exchange. In the U.S. exchanges, the opening bell rings at 9:30 a.m. EST and the closing bell rings at 4:00 p.m. EST. In between these two times, shares of publicly traded companies and other exchange marketed products get bought and sold. In a sense, the opening bell is like a “starter pistol” for the sometimes hectic activity that takes place on the floor of an exchange.

Historians interested in the history of financial markets and money matters show that the sound used to open and close markets was not always a bell. Prior to the late 1800s, historic resources reveal that the markets were opened with a gavel. In 1903, the New York exchange switched from using a gong to a bell.

In recent times, the New York market has seen another change around the use of opening the markets with a bell. Where ringing the bell used to be reserved for floor managers and executives involved in the exchange, now a variety of “special guests” ring the bell for the New York exchange. In addition, some special events get announced or promoted at the opening bell ceremony.

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Other news from world markets shows that other countries have adopted the practice of using an opening bell to mark the beginning of the trading day on their exchanges. The European community has gradually put together a collection of regional “Euronext” exchanges which replaces a less ordered set of national exchanges prior to the end of the twentieth century. Within the Euronext exchanges, opening with a bell seems to be a common standard, though some of the markets still use a gong, according to recent reports on opening ceremonies for the Euronext exchanges.

The opening bell doesn’t just have relevance for individual traders or brokers; companies also look at the opening bell and the ceremonies around it as an opportunity. Some companies will time important changes according to the opening bell to make their promotions match the activity of the markets. The opening sound of a bell is part of a greater set of events that orders a particular trading day and affects what goes on at each moment of the day’s financial events.

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