Definition
A jump where a market opens noticeably above (gap up) or below (gap down) where it last closed. If it also opens beyond the previous high or low, it leaves an empty space on the chart.
The story
Regular stock trading ends at 3 PM CT (Central Time). If a company reports strong results after the close and buyers pile in, the next morning's first trade can be well above yesterday's close, with nothing traded in between. Futures like NQ (E-mini Nasdaq-100 futures) and ES (E-mini S&P 500 futures) trade nearly around the clock, so on their charts gaps mostly appear around the daily pause and the weekend.
Why you'll see it
Earnings and big news released outside market hours are the usual cause, so gaps show up in coverage after those events.
Connects to
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms