Split close refers to a situation in financial markets where there are noticeable price discrepancies at the end of a trading session. Specifically, it occurs when the closing prices of various transactions for futures contracts differ significantly. This condition can indicate volatility or irregularities in market behavior during the final trades of the day.
In legal and financial contexts, split close is relevant primarily in trading and investment law. It may arise in disputes related to market manipulation, trading practices, or regulatory compliance. Legal professionals may encounter split close issues when advising clients on trading strategies or when representing them in disputes involving market practices. Users can manage some aspects of these issues with the right legal templates from US Legal Forms, especially those related to trading agreements or compliance documentation.
Here are a couple of examples of abatement:
Example 1: A trader notices that the closing price of a futures contract for oil differs by a significant margin from the previous day's close. This split close raises questions about market integrity and may prompt an investigation.
Example 2: A hypothetical example might involve a trader who experiences a split close due to sudden market news, leading to unexpected price changes at the end of the trading session.
| Term | Definition | Key Differences |
|---|---|---|
| Market Close | The official end of a trading session. | Market close does not imply price discrepancies. |
| Closing Price | The final price of a security at the end of a trading session. | Closing price can be affected by split close conditions. |
If you encounter a split close in your trading activities, consider the following steps:
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| Attribute | Details |
|---|---|
| Typical Fees | Varies by brokerage and trading platform |
| Jurisdiction | Applicable in all trading markets |
| Possible Penalties | Regulatory fines for market manipulation |
A split close can be caused by sudden market news, low trading volume, or high volatility.