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An at-the-close order occurs when an investor attempts to execute a buy or sell order on some type of security at a price as near as possible to the security's closing price for the day. To do this, the order must be placed very near the end of trading for the day, often in the final seconds before the closing bell. There is a risk run by an investor placing an at-the-close order that it may not be executed in time. This is the opposite of an at-the-opening order, which is meant to be executed at as close as possible to a security's opening price for the day.
When a stock or other type of investment security is traded back and forth between investors, its price will change. As more people buy the stock, its price will rise, and as more people sell it, its price will fall. Those investors wary of the daily trading fluctuations attached to any security may attempt an at-the-close order, which, as its name implies, is completed right before the trading day closes.
Investors should realize that an at-the-close order is a type of market order. This means that it is executed at the best available price to the investor. For that reason, it precludes the investor from doing a little shopping to find more favorable prices. It is meant to be done at precisely the time that is stipulated, which in this case is in the waning moments of a trading day.
The main reason that an investor might want to go through with an at-the-close order is that it takes a bit of uncertainty out of the trading process. It also could be a sign that the investor thinks that something could occur in off-trading hours which would cause the stock's price to change significantly in their favor. Of course, waiting so long to execute a trade can be risky, especially if the trade doesn't actually go through before the trading day is complete. There is also no guarantee that the price garnered will be the actual closing price.
A similar maneuver to the at-the-close order in terms of strategy although quite the opposite in terms of timing is the at-the-opening order. As the name implies, this trade is a market order meant to be done as close as possible to the day's opening price on the security in question. In both cases, the trades are a way for investors manage the price fluctuations that occur in a trading day.