The two major American stock exchanges, the New York Stock Exchange and NASDAQ, observe nine holidays each year. Many, such as Christmas Day and Thanksgiving, are recognized by other financial institutions and the federal government. But except for 1898, 1906 and 1907, the exchange has been closed on Good Friday at least since 1864, when such records began, and likely back to 1793. The reasons behind the closing has prompted some great theories.
Good Friday is primarily a Christian holiday that marks the biblical story of the crucifixion of Jesus Christ. It also usually coincides with the Jewish holiday of Passover. Many believe that the NYSE observes the holiday because of the confluence of those two religious commemorations. Foreign markets, especially in Europe, take several days off around Easter, as well.
A Religious Deal
Eddy Elfenbein, who writes for crossingwallstreet.com and has worked at the NYSE, says his bosses once told him the day off had to do with an “inter-confessional” deal between Christians and Jews. It makes sense, given the proximity of Good Friday and Passover, but there is absolutely no information to back up that assertion.
Some theorize that because the European markets are closed for Easter, it makes little sense for U.S. markets to be open because the trading volume is much lower than normal days, according to the financial blog kapitall.com.
Some say traders in the 19th and early 20th centuries became skittish about the date, according to kapitall.com. One of the common myths about why the market's closed on Good Friday is that the Panic of 1907 was triggered by a huge sell-off on Good Friday, which prompted NYSE officials to close the markets on that date ever since. The only problem? The panic actually started in October, not the spring.
Another Plausible Reason
John Forman, who wrote “The Essentials of Trading,” provides another plausible explanation. Forman, who used to work as a broker, writes that the NYSE has a favorable lease for its property in Manhattan, but the terms require the building to be closed on major Christian holidays, including Good Friday. This theory is also questionable because the NYSE did not move to its current location at 18 Broad Street until 1903.
T.L Chancellor has more than 12 years of newspaper reporting and editing experience. She has written extensively about education, business and city government. She has also worked at a public relations firm, focusing on environmental issues with clients.