Daily Cut-Off

What is 'Daily Cut-Off'

In the forex market, a particular point in time specified by a forex dealer to stand as the end of the current trading day and the beginning of a new trading day. This is done for primarily administrative and logistical reasons, because although the forex market trades 24 hours a day, the market and its intermediaries require a specified beginning and end to each trading day in order to record trade dates and define settlement periods.

Explaining 'Daily Cut-Off'

For example, let's say a forex dealer specified that the daily cut-off was 5pm every day, and a trader placed two forex trades on the evening of January 1 - one at 4:50pm and another at 5:15pm. Since the daily cut-off is 5pm, the first trade would be booked as taking place on January 1, while the second would be recorded as a January 2 trade, since it took place after the daily cut-off.

Further Reading

Q&A About Daily Cut-Off

When is the beginning of each new trading day specified by the forex dealer?

The beginning of each new trading day is specified by the forex dealer at 5pm every day.

How do economists study these topics?

Economists use a variety of methods to gather information about economic activity. Some common methods include surveys, experiments, historical analysis, and mathematical modeling.

What happens when trades are placed after 5pm but before midnight on any given day?

Trades placed after 5pm but before midnight are recorded as taking place on the next business day.

What is Daily Cut-Off?

The daily cut-off is the time at which a forex dealer specifies that trading will end for the day and begin anew.

How does the daily cut-off help with administrative and logistical reasons?

The daily cut off helps with administrative and logistical reasons because it allows traders to record trade dates, define settlement periods, etc.

Why does a forex dealer specify a daily cut-off?

A forex dealer specifies a daily cut-off to help with administrative and logistical reasons.