The exchange can close at a price nobody actually traded at. Sounds impossible. It isn’t. In many markets, the official closing price isn’t simply the last trade of the day. It’s often determined through a closing auction. That distinction matters. Imagine a stock’s final continuous market trade happens at $100. Then the closing auction receives a large imbalance of buy and sell orders. The auction can establish an official closing price of $101. The last trade was $100. The official close is $101. Both numbers can be correct. That’s because they answer different questions. $100 Where did the continuous market last trade? $101 At what price did the closing mechanism determine the market could match the remaining interest? This matters far beyond curiosity. Index calculations, portfolio valuations, performance reports and derivatives can depend on official closing prices. So when you see “The stock closed at $101.” don’t automatically imagine someone bought it at $101 as the final transaction of the day. The “close” isn’t always a moment. Sometimes it’s a process. And one of the most familiar numbers on a price chart… isn’t necessarily the number you think it is.