Attention trading junkies! The stock market won't be open this Friday even though almost every other business will be. While Good Friday isn't a federal holiday, it is a stock market holiday with little concrete explanation. After being closed on Good Friday off and on, 1907 was the final year in which the exchange was open on Good Friday. Despite this long held tradition several myths surrounding the market closure exist.
Fact or fiction?
1) The NYSE has a tradition of closing on Good Friday for Jewish and Christian traders looking for a break between Passover and Easter.
2) The lease of the building housing the stock exchange stipulates that no business be conducted on Good Fridays. This myth seems largely debunked by the fact the the exchange has changed locations.
3) Easter isn't a federal holiday but many businesses that operate on Sunday close for the festivities. Since Easter is always on a Sunday, closing up shop on Friday is a good proxy.
4) Good Friday isn't a government holiday at the federal level but many states recognize it as a state holiday. As a result may local governments, banks, and other institutions will close this Friday making a dent in trading volume.
5) Similarly, markets aren't open in Europe for Good Friday. American and European holidays aren't synced to the same schedule but closing in times of weak trading demand makes economic sense.
Kapitall's David Neubert, provided two more interesting theories:
6) As the discrimination against Irish immigrants abated around the turn of the century there was a preponderance of Irish Catholic exchange officials at the NYSE who pushed for closing of the Exchange on Good Friday.
7) My favorite, and the one I heard around the trading floors of New York, was that two or three years in a row during the 1890′s, there was a big drop in the market on Good Friday. Traders took it as a sign from God that he didn’t want the exchange open.
The truth is still out there if anyone even remembers exactly why the market is closed this Friday. Regardless, busy traders can enjoy the long weekend!