If you’ve read about markets, tested strategies, or calculated returns, you’ve probably come across a simple but important question:

How many trading days in a year are there, 252 or 256?

Some sources confidently state 252. Others insist the number is 256. A few hedge their bets and say, “It depends.”

So which one is correct?

This article breaks down how many trading days in a year there really are, why different numbers exist, how professionals actually use them, and which figure you should rely on depending on your trading or investing goals.

By the end, you’ll understand not just the answer, but the mechanics, assumptions, and practical implications behind it.

Why the Number of Trading Days in a Year Actually Matters

At first glance, the difference between 252 and 256 trading days may seem trivial. It’s only four days, right?

In reality, that small difference can materially affect:

• Annualized returns

Small differences in the number of trading days significantly influence the calculation of annualized returns, affecting how investors perceive performance over time.

• Volatility calculations

Volatility models rely on trading days to annualize daily price fluctuations; an incorrect day count can misrepresent true market risk levels.

• Sharpe and Sortino ratios

These risk-adjusted performance metrics use trading days to scale returns and volatility, so errors impact the accuracy of strategy evaluations.

• Backtesting accuracy

Precise trading day assumptions are critical when simulating past strategy performance to ensure realistic expectations and avoid misleading conclusions.

• Position sizing models

Risk management and position sizing algorithms rely on trading days for timing calculations, which directly impact exposure and capital allocation.

• Algorithmic strategy assumptions

Automated trading systems use trading day counts for timing entries, exits, and risk controls, where inaccuracies may degrade strategy effectiveness.

Professional traders, quantitative analysts, and portfolio managers are deeply concerned about the number of trading days in a year, as it directly impacts risk and performance metrics.

The Short Answer: 252 Is the Industry Standard, But Not a Law of Nature

Let’s address the headline question directly. The most commonly accepted answer to “how many trading days in a year” is 252. This figure results from a straightforward calculation: starting with 365 calendar days in a year, subtracting 104 weekend days, 52 Saturdays, and 52 Sundays, and then subtracting approximately nine U.S. market holidays. What remains is roughly 252 trading days per year.

Over time, this number has become the default assumption in finance, especially for equity markets, volatility modeling, risk metrics, and academic finance literature. However, it is important to understand that this is not the only valid number, and this is where much of the confusion around trading days begins.

Why Some Sources Say 256 Trading Days in a Year

If 252 is so widely accepted, why do some platforms, calculators, and blogs claim there are 256 trading days in a year?

The answer lies in simplification and historical averaging.

Some competitors:

• Divide 365 by 7 to get ~52.14 weeks
• Multiply by 5 trading days per week
• Arrive at 260–261 theoretical weekdays
• Then subtract an estimated number of holidays

Depending on assumptions, this can land anywhere between 252 and 256.

Older trading models and simplified educational content sometimes rounded up to 256 because:

• It’s divisible by powers of two (useful in early computing)
• It simplifies mental math
• It ignores partial holidays and early closes

This is a key gap in many competitor articles: they state 256 without explaining why or when it applies.

The Real Reason the Number Isn’t Fixed

One major misconception in competing content is the idea that the market operates on a perfectly consistent calendar.

In reality, the number of trading days in a year varies slightly every year due to:

• Leap years
• Holiday schedules
• Holidays falling on weekends
• Market closures for national mourning or emergencies

For example:

• Some years have 251 trading days
• Others have 252
• Occasionally 253

This variability is why professionals rely on conventions, not absolutes.

Why 252 Became the Dominant Standard

1. Academic Finance Adoption

Most financial research papers use 252 trading days per year when annualizing:

• Returns
• Volatility
• Correlation

This created a feedback loop where tools and institutions followed suit.

2. Risk & Volatility Calculations

Volatility is commonly annualized using:

\sigma_{annual} = \sigma_{daily} \times \sqrt{252}

Changing this number alters reported risk, making comparisons inconsistent.

3. Institutional Consistency

Portfolio managers need standardized assumptions to:

• Compare funds
• Report performance
• Communicate risk to investors

252 became the shared language.

Where Context Is Often Missing

Many articles mention how many trading days are in a year, but often miss explaining why this distinction actually matters to traders and investors.

Here’s the missing context:

When the Exact Number Matters

• Backtesting trading strategies
• Calculating CAGR
• Volatility modeling
• Algorithmic trading systems
• Risk-adjusted performance metrics

When It Barely Matters

• Long-term buy-and-hold investing
• Qualitative market analysis
• Macro trend discussions

Professionals care because small mathematical assumptions compound over time.

How Traders Actually Use Trading Days in Practice

1. Backtesting Strategies

When testing a strategy over 10 years:

• Using 252 vs 256 changes trade frequency expectations
• Alters drawdown calculations
• Impacts expectancy models

Accurate assumptions improve realism.

2. Annualized Returns

To annualize a daily return:

(1 + r_{daily})^{252} – 1

Using 256 instead inflates results slightly, a subtle but important distortion.

3. Volatility & Risk Metrics

Risk models depend heavily on the square root of time. Even small differences in the assumed trading days change:

• Position sizing
• Risk parity allocations
• Stop-loss logic

Ignoring Global Markets

Most articles answering how many trading days in a year focus solely on U.S. equities.

But globally:

• UK markets have different holidays
• Asian markets observe lunar calendars
• Crypto markets trade 365 days a year

So the correct answer depends on which market you’re analyzing.

This article explicitly clarifies that 252 applies primarily to U.S. equity markets.

What About Forex and Crypto?

Forex markets operate differently from traditional equity markets. They trade 24 hours a day, five days a week, resulting in roughly 260 trading days per year. However, liquidity in forex can vary significantly during holidays, which may affect trading conditions and execution.

Crypto markets are even more distinct. They trade continuously, 365 days a year, with no weekends or holidays. Because of this nonstop activity, the question of “how many trading days in a year” doesn’t apply in the same way to cryptocurrencies. This important distinction is often overlooked in many market discussions.

Why Professionals Still Default to 252 Anyway

Despite all these nuances, 252 remains dominant because:

• It standardizes communication:

Using 252 trading days creates a shared baseline, allowing traders, analysts, and institutions to compare performance, risk, and results consistently across strategies and markets.

• It aligns with institutional tools:

Most financial models, risk systems, academic research, and trading platforms are built around 252, ensuring compatibility, accuracy, and consistency in professional analysis.

• It reduces confusion in reporting:

A single, widely accepted convention prevents discrepancies in performance reporting, risk disclosures, and benchmarking, reducing misunderstandings between managers, investors, and regulators.

Professionals understand it’s a modeling assumption, not a literal count.

252 vs 256: Which Should You Use?

Use 252 trading days if you:

• Trade U.S. equities
• Backtest strategies
• Calculate volatility or Sharpe ratios
• Compare performance to benchmarks

Avoid 256 trading days unless:

• You’re referencing legacy systems
• You are matching an older dataset exactly
• You explicitly document the assumption

For modern trading and analysis, 252 is the correct and defensible choice.

Final Answer: How Many Trading Days in a Year?

Markets reward participants who understand the assumptions behind their calculations, not just the outcomes. The question of how many trading days in a year highlights a deeper truth: financial models are approximations, precision improves decision-making, and small details compound significantly over time.

So, how many trading days are there in a year?

The professional, industry-standard answer is 252 trading days per year for U.S. equity markets.

Not because it’s perfect, but because it’s:

• Consistent
• Widely accepted
• Mathematically defensible
• Aligned with institutional practice

Understanding why this number exists is far more important than memorizing it.

Whether you’re a trader, analyst, or long-term investor, using accurate, well-understood assumptions keeps your strategy grounded in reality. Relying on convention without understanding can quietly distort results, while precision builds. 

Frequently Asked Questions

1. How Many Trading Days in a Year: A Realistic Annual Range

Rather than a single fixed number, the most accurate way to think about trading days is as a range. In U.S. equity markets, the typical number of trading days varies between 251 and 253 each year, with 252 being the widely accepted standard assumption.

While the figure of 256 trading days occasionally appears, it is rarely used in modern professional finance. This number is more commonly found in older textbooks, simplified blogs, and non-specialist calculators, but it does not reflect the current conventions embraced by institutional traders and analysts.

2. Why are there only 252 trading days?

Again, why 252 and not 365? Well, it’s due to weekends and public holidays. Stock markets operate Monday through Friday, closing on Saturdays and Sundays. This immediately reduces the number of potential trading days by about 104 days (52 weekends).

3. How many business days are there in a year 252?

This would normally translate into 252 workdays in a year (260 – 8 bank holidays) with a regular workweek of Monday through Friday.

To determine the exact number of workdays in a specific year, start by calculating the total days in that year. Then, subtract the weekends, federal holidays, and vacation days to get the final count.

4. What are the common myths about trading days?

Myth 1: The market always has 252 trading days

Reality: It varies slightly year to year.

Myth 2: 256 is more “accurate”

Reality: It’s a simplified approximation.

Myth 3: The difference doesn’t matter

Reality: It matters in professional modeling.

These myths persist because many articles repeat numbers without context, a clear quality gap.