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Price gaps (gap up, gap down, and filling a gap)

The part of a move that happens while the market is shut — the opening price measured against the previous session's close — and the level price has to trade back through to "fill" it.

A gap is the distance between one session's closing price and the next session's opening price. If a company closes at 100 and opens at 106 it has "gapped up" 6%, and the important detail is that no trade happened at any price in between: the market was shut while whatever caused the move was digested. Gaps down work the same way in reverse. They are not random — they cluster around results, trial readouts, guidance changes and bids, because those are the things announced outside trading hours.

A gap is "filled" the first time price trades back through the level it jumped from. For a gap up that means a later session whose LOW reaches back down to the old close; for a gap down, a session whose HIGH reaches back up to it. Until that happens the gap is open, and there is a price range on the chart that nobody has traded in. Folklore holds that gaps "always get filled", and the data is more ordinary than that: across the companies stocks-llm covers, of the gaps of 2% or more that have closed, about a third closed during the very session that opened them and the median of the rest took two sessions — but a large number are still open, and a gap staying open is simply a fact about where trades have happened, not a force pulling price back to fill it.

stocks-llm measures gaps nightly from delayed daily-close prices, split-adjusted, comparing each session's open with the previous session's close. One caution is worth stating plainly, because it is a limitation of the measurement rather than of the market: a change in how a price series is adjusted — an unrecorded split, a data-vendor correction — looks exactly like a gap in the numbers, since that is what it is. Readings are declined where a session's price is identifiable as a bad print, but the most recent session has no session after it to check against, so a very large gap on the newest bar is worth treating as provisional. A gap describes a session that has already opened. It is not a signal, it says nothing about the next session, and nothing here is advice.

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Related terms

  • Moving average (50-day & 200-day) — A moving average smooths a stock’s price by averaging its recent closing prices — the 50-day and 200-day are the most-watched trend lines.
  • Golden cross — A golden cross occurs when a stock’s 50-day moving average crosses above its 200-day moving average — a widely-watched long-term momentum shift.
  • Death cross — A death cross occurs when a stock’s 50-day moving average crosses below its 200-day moving average — the bearish counterpart of a golden cross.
  • RSI (Relative Strength Index) — The RSI is a 0–100 momentum oscillator that measures how fast a stock’s price has risen or fallen recently; readings below 30 are "oversold" and above 70 "overbought."
  • Overbought & oversold — "Overbought" and "oversold" describe a stock whose price has moved up or down unusually fast recently — most commonly measured with a 14-day RSI above 70 or below 30.

See more terms in the stocks-llm glossary.

Informational only — NOT financial advice. This is an educational definition, not a recommendation to buy or sell anything. Metrics on stocks-llm are delayed data and may be missing or stale. Always verify information independently and consult a qualified financial professional before making any investment decision.

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Informational only — NOT financial advice.

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