Trading days are the days when financial markets, such as the U.S. stock exchanges, are open for buying and selling securities. Knowing the number of trading days in a year is important for traders, investors, and analysts when calculating annual returns, backtesting strategies, or planning trades.
Standard Trading Days
In the United States, major stock exchanges like the New York Stock Exchange (NYSE) and NASDAQ typically operate Monday through Friday, excluding official holidays.
Key points:
- Weekends: Markets are closed on Saturdays and Sundays.
- Holidays: There are usually 9–10 market holidays observed each year, such as:
- New Year’s Day
- Martin Luther King Jr. Day
- Presidents’ Day
- Good Friday
- Memorial Day
- Independence Day
- Labor Day
- Thanksgiving Day
- Christmas Day
Calculating Trading Days
A standard year has 365 days, and a leap year has 366 days.
- Step 1 – Count weekdays:
- 52 weeks × 5 weekdays = 260 weekdays
- Add extra weekday if year starts midweek (varies by year)
- Step 2 – Subtract market holidays:
- Average of 9–10 holidays → 260 – 9 ≈ 251 trading days
- Leap Years:
- Usually add one extra weekday → 252 trading days
| Year Type | Weekdays | Holidays | Trading Days |
|---|---|---|---|
| Standard Year | 260 | 9 | 251 |
| Leap Year | 261 | 9 | 252 |
Variations
- Partial Market Days: Some holidays may have early market closes (e.g., Christmas Eve or day after Thanksgiving).
- Global Markets: Other exchanges have different holidays and weekends. For example, European markets may close for additional national holidays.
- Financial Instruments: Futures, forex, and cryptocurrency markets may operate on different schedules. Crypto markets are open 24/7, so “trading days” are not limited.
Practical Use
- Backtesting: Knowing trading days allows calculation of average daily returns:
Performance Metrics: Sharpe ratio, drawdowns, and volatility estimates require accurate trading-day counts.
Planning Trades: Helps traders anticipate days of higher liquidity and news events.
Conclusion
On average, the U.S. stock market has about 251 trading days in a standard year and 252 in a leap year, accounting for weekends and holidays. While this number can vary slightly due to holiday schedules or exchange-specific adjustments, it provides a solid framework for trading, backtesting, and performance analysis.