Unlike many other stocks, AAPL always trades at a very high volume before the market close. Is there any reason this happens? Or this is just by coincidence?
asked Nov 27, 2014 at 14:28
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Possibly MOC orders.– assyliasNov 27, 2014 at 15:34
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4@assylias Some won't grok your TLA.– Chris W. ReaNov 27, 2014 at 20:13
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4You are right: MOC = Market On Close– assyliasNov 27, 2014 at 23:02
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1 Answer
A huge amount of money in all financial markets is from institutional investors, such as mutual funds, government pension plans, sovereign wealth funds, etc. For various reasons these funds do all of their trading at the end of the day. They care primarily that their end-of-day balances are in line with their targets and are easy to audit and far less about "timing the market" for the best possible trades.
So, if you're looking at a stock that is owned by many institutional investors -- such as a stock (like AAPL) that makes up a significant portion of an index that many funds track -- there will be a huge amount of activity at this time relative to stocks that are less popular among institutions.
Even just in its introduction this paper (PDF) gives a fair overview of other reasons why there's a lot of trading at end-of-day in general.
(In fact, because of all this closing activity and the reliance on end-of-day prices as signposts for financial calculations, the end-of-day has for decades been the single most fraud-ridden time of the trading day. Electronic trading has done away with a lot of the straight-up thievery that floor traders and brokers used to get away with at the expense of the public, but it still exists. See, for example, any explanation of the term banging the close, or the penalties against 6 banks just last month for manipulating the FX market at the close.)
