28/08/2026
๐ Gap Trading: What Happens When the Market Opens at a Different Price?
Sometimes a market closes at one price and opens later at a noticeably different level. The empty space between those prices is known as a price gap.
But why does it happen?
๐ธ Common reasons for market gaps:
โข Important developments outside regular trading hours
โข Company announcements and earnings reports
โข Changes in economic expectations
โข A sudden imbalance between buyers and sellers
๐ธ Not every gap behaves the same way.
Some gaps appear inside an established trading range, while others accompany a major change in market direction or a strong continuation of an existing move.
๐ธ Traders can study the size, location, volume and surrounding price structure of a gap to better understand what the market may be communicating.
A gap isnโt automatically a signal to enter a position โ itโs information that needs context.