gap investment & finance definition
- In
trading terms, the price movement when the opening price of a trading day is
higher or lower than the previous day’s level, which leaves a gap on the price
chart. In that situation, a stock or futures contract is said to gap open lower
or higher.
- A
company’s lack of financing, such as a gap of $1 million that hasn’t been
filled by investors.
See gap in Wall Street Words
A price range in which no shares are traded. A gap on a chart is created when the lowest price at which a security trades on one day is above the highest price at which the same security was traded on the previous day. Thus, if a stock trades between a low of $51 and a high of $52.50 on Monday and between $53.50 and $54 on the following day, a gap from $52.50 to $53.50 is created on a chartist's graph. A gap may have varying degrees of significance, depending on the general formation and the volume at the time the gap occurs. Also called
price gap. See also
breakaway gap,
exhaustion gap,
runaway gap.
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