Stock Gap
Learn what a stock gap is, why they happen, and how you can identify them on a chart.
A stock gap is created when a security’s price opens significantly above or below its prior closing price.
Gaps occur overnight, typically after an earnings report or major news announcement dramatically re-prices the stock.
For example, if a stock closes at $100 per share, it may gap up and open at $110 the following day. Conversely, bad news could cause the stock to gap down to $50 a share.
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