Close Time (Expiration)
Definition
Close Time (or expiration) is when trading stops for a market. Often before or exactly at the event time; settlement follows after resolution.
Timing Variations
Before Event
Most markets close before the event to prevent information asymmetry:
Example: Election market
- Event: Nov 5, 8:00 PM ET (polls close)
- Close Time: Nov 5, 7:59 PM ET
- Reason: Prevent insider trading from early results
At Event Time
Some markets close exactly when the event occurs:
Example: Sports game
- Event: Game starts at 1:00 PM
- Close Time: 1:00 PM (kickoff)
- Reason: No information advantage possible
Well After Event
Some markets stay open until resolution data is available:
Example: Economic data
- Event: June 2024 (whole month)
- Close Time: July 15 (when report published)
- Reason: Allows trading on interpretation
Why Markets Close
Prevent Insider Trading
- Stop trading before outcomes are known
- Prevent unfair information advantages
- Maintain market integrity
Ensure Fair Resolution
- No trades during uncertain period
- Clear cutoff for positions
- Organized settlement process
Platform Operations
- Time to verify outcomes
- Process payouts systematically
- Handle disputes fairly
Timeline Example
Market: "Will GDP exceed 3% in Q4?"
- Creation: Oct 1
- Trading Period: Oct 1 - Jan 30
- Close Time: Jan 30, 11:59 PM ← Trading stops
- Data Release: Jan 31, 8:30 AM
- Resolution: Jan 31, 9:00 AM
- Payout: Jan 31, 10:00 AM
Between close and payout:
- No trading allowed
- Positions are frozen
- Awaiting official data
- Platform verifies source
Trading Strategies
Before Close
- Last-minute trades: React to late-breaking news
- Risk: Less time to exit if wrong
- Volatility: Prices move quickly near close
Timing Your Entry
- Early: Better prices, more time to adjust
- Late: More information, less uncertainty
- At close: Maximum information, no exit option
Close-Time Plays
Some traders specialize in:
- Predicting late movements
- Arbitraging vs other markets
- Capturing mispricing near deadline
Platform Differences
Polymarket
- Close times vary by market
- Clearly displayed on market page
- Countdown shown as deadline approaches
Kalshi
- Close times in contract specifications
- Series may have regular patterns
- Trading halts precisely at close