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Gap/gapping

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 1 May 2023

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Gap/Gapping

Gap/Gapping is a financial term that refers to the difference between the current market price of a security and the price at which it was previously traded. This difference is usually measured in points, and it is used to assess the volatility of a security. Gapping is a common phenomenon in the stock market, and it can be caused by a variety of factors, such as news events, economic data releases, and changes in investor sentiment.

History of Gap/Gapping

Gap/Gapping has been used as a financial term since the early 20th century. It was first used to describe the difference between the price of a security at the close of one trading day and the price at the opening of the next trading day. Over time, the term has come to encompass any difference between the current market price of a security and the price at which it was previously traded.

Comparison Table

Type of Gap Description
Common Gap A gap between the current market price and the price at which it was previously traded.
Breakaway Gap A gap that occurs when a security breaks out of a trading range.
Runaway Gap A gap that occurs when a security continues to move in the same direction after breaking out of a trading range.
Exhaustion Gap A gap that occurs when a security reaches the end of a trend.

Summary

Gap/Gapping is a financial term that refers to the difference between the current market price of a security and the price at which it was previously traded. Gapping is a common phenomenon in the stock market, and it can be caused by a variety of factors. There are several types of gaps, including common gaps, breakaway gaps, runaway gaps, and exhaustion gaps. For more information about gap/gapping, please visit Investopedia, The Balance, and Investing.com.

See Also

  • Price Gap
  • Gap Up
  • Gap Down
  • Gap Analysis
  • Gap Risk
  • Gap Trading
  • Gap Fill
  • Gap Theory
  • Gap Option
  • Gap Fund

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