Gap / Gap-Up
When a stock opens meaningfully above or below the previous close, leaving a price "gap" on the chart.
What it means
A gap happens when overnight news — earnings, FDA decisions, guidance — moves the fair price while the market is closed. The first regular-hours trade prints far from yesterday's close, and the empty space between them is the gap.
Gap trading splits into two camps: gap-and-go (the gap continues) and gap-fade (the gap fills back). Which one works depends heavily on the size of the gap, the float, and the first minutes of volume.
Why traders care
- Large gaps concentrate the day's opportunity — and its risk — into the first hour.
- The open price becomes a key reference level for the rest of the session.
In a TraderWe strategy
if HhmmSs < 94500 and ChangePct > 4 and Price > OpenPrice:
Buy()Early entry on a gapper that is holding above its open.
Related terms
Educational content, not investment advice. Engine details describe how TraderWe computes this value; other platforms may define it differently.