The result is a gap in the stock price when the market re-opens at 9:30 AM EST. In after-hours that same day or pre-market trading the following morning, something newsworthy happens to create either a buying or selling frenzy. How the price gap is createdĪ price gap is created when a stock closes for the day at 4:00 PM EST, and then the next day opens dramatically higher or lower than the previous closing price.

Most mutual funds, ETF's, and other illiquid assets actually gap more frequently which make the gaps less important. Generally speaking, gaps are rare for the normal stock. Nearly all stock price gaps happen in pre-market trading or during after-hours trading. Let's explore why they happen and what you can do (if anything) to trade them successfully. Even the most experienced traders are still taken back when there is an unexpected gap in a stock they are trading. Decision recipes Comparing underlying symbol price Evaluating symbol type Evaluating underlying symbol OHLC Comparing underlying symbol properties Evaluating underlying symbol performance Evaluating underlying symbol standard deviation Comparing underlying symbol price to an indicator Comparing multiple underlying symbol indicators Evaluating underlying symbol implied volatility rank Evaluating underlying symbol earnings reporting Evaluating underlying symbol price probability Evaluating underlying symbol probability within range Evaluating bot properties Evaluating bot available capital for opportunities Comparing bot position count to position type Comparing bot position count to underlying symbol Evaluating bot position count to position type and underlying symbol Evaluating bot last position activity Evaluating bot last activity with underlying symbol Evaluating bot position activity history Evaluating bot position activity history with underlying symbol Comparing bot active orders status Comparing bot active orders status with underlying symbol Evaluating bot position availability Evaluating bot tags Evaluating opportunity availability Evaluating opportunity return expectations Comparing opportunity attributes Comparing opportunity leg attributes Comparing opportunity bid-ask spread Evaluating opportunity probabilities Evaluating position performance Comparing profit target to trailing value Comparing position time to expiration Comparing position duration Evaluating position underlying symbol Comparing position properties Comparing position leg properties Evaluating position type Evaluating position side Comparing underlying symbol price to position leg Evaluating position tags Evaluating underlying symbol indicator properties Comparing multiple underlying symbol indicator properties Evaluating MACD technical indicator Comparing Bollinger Bands to symbol price Evaluating stochastic technical indicator Comparing VIX properties Evaluating market time of the day Evaluating days of the week Evaluating bot switchesīeginning traders are probably shocked the first time they experienced a stock price gap.

Fill the gap stocks