What does gap mean

What does gap mean

James Chen, CMT is an expert trader, investment adviser, and global market strategist. He has authored books on technical analysis and foreign exchange trading published by John Wiley and Sons and served as a guest expert on CNBC, BloombergTV, Forbes, and Reuters among other financial media.

What Is a Gap?

A gap is an area discontinuity in a security’s chart where its price either rises or falls from the previous day’s close with no trading occurring in between. Gaps are common when news causes market fundamentals to change during hours when markets are typically closed, for instance an earnings call after-hours.

Key Takeaways

What Does A Gap Tell You?

Gaps typically occur when a piece of news or an event causes a flood of buyers or sellers into the security. It results in the price opening significantly higher or lower than the previous day’s closing price. Depending on the kind of gap, it could indicate either the start of a new trend or a reversal of a previous trend.

Gapping occurs when the price of a security or asset opens well above or below the previous day’s close with no trading activity in between. Partial gapping occurs when the opening price is higher or lower than the previous day’s close but within the previous day’s price range. Full gapping occurs when the open is outside of the previous day’s range. Gapping, especially a full gap, shows a strong shift in sentiment occurred overnight.

Some traders make it a strategy to profit from playing the gap when such a situation occurs.

The Difference Between Different Types of Gaps

There are some fundamental differences between the different types of gaps: – Common Gaps, Breakaway Gaps, Runaway Gaps, and Exhaustion Gaps.

Each type of gap has certain consequences for traders. For example, reversal or breakaway gaps are typically accompanied by a sharp rise in trading volume, while common and runaway gaps are not. Additionally, most gaps occur due to news, or an event such as earnings or an analyst’s upgrade/downgrade.

Common gaps happen more regularly and do not always need a reason to occur. Also, common gaps tend to get filled, whereas the other two gaps may signal a reversal or continuation of a trend.

Example of a Gap

Image by Sabrina Jiang © Investopedia 2021

In the next example, Alphabet Inc.’s (GOOGL) chart shows a runaway gap. Alphabet’s stock was already increasing in April 2017 when it gapped sharply higher, continuing its previous uptrend.

Image by Sabrina Jiang © Investopedia 2021

Limitations of Gaps

There are limitations despite gaps being easy to spot. The glaring flaw is one’s own ability to identify the different types of gap that occur. If a gap is misinterpreted, it could be a disastrous mistake causing one to miss an opportunity to either buy or sell a security, which could weigh heavily on one’s profits and losses.

What does GAP stand for?

What does GAP mean? This page is about the various possible meanings of the acronym, abbreviation, shorthand or slang term: GAP.

Güneydogu Anadolu Projesi

Great Atlantic & Pacific Tea Company, Inc.

GTPase Activating Protein

Gap Analysis Project

Graduate And Professional

Gap Analysis Program

Good Agricultural Practice

Global Action Plan

Great Adventure People

Guaranteed Auto Protection

Guaranteed Asset Protection

Gimp Animation Package

Global Access Project

Great Ape Project

God Answers Prayer

Greyhound Adoption Program

Glock Automatic Pistol

God Answers Prayers

Gifts And Presents

Governance And Planning

Graduates And Professionals

Genocide Awareness Project

Gluteal Artery Perforator

What does GAP mean?

Popularity rank for the GaP initials by frequency of use:

Couldn’t find the full form or full meaning of GAP?

Maybe you were looking for one of these abbreviations:

Discuss these GAP abbreviations with the community:

Report Comment

We’re doing our best to make sure our content is useful, accurate and safe.
If by any chance you spot an inappropriate comment while navigating through our website please use this form to let us know, and we’ll take care of it shortly.

Definitions for GAP
gæp GAP

Here are all the possible meanings and translations of the word GAP.

Princeton’s WordNet (0.00 / 0 votes) Rate this definition:

gap, spread noun

a conspicuous disparity or difference as between two figures

«gap between income and outgo»; «the spread between lending and borrowing costs»

opening, gap noun

an open or empty space in or between things

«there was a small opening between the trees»; «the explosion made a gap in the wall»

a narrow opening

«he opened the window a crack»

a pass between mountain peaks

a difference (especially an unfortunate difference) between two opinions or two views or two situations

break, interruption, disruption, gap verb

an act of delaying or interrupting the continuity

«it was presented without commercial breaks»; «there was a gap in his account»

gap, breach verb

make an opening or gap in

Wiktionary (0.00 / 0 votes) Rate this definition:

An opening in anything made by breaking or parting.

An opening allowing passage or entrance.

We can slip through that gap.

An opening that implies a breach or defect.

There is a gap between the roof and the gutter.

A vacant space or time.

I have a gap in my schedule next Tuesday.

I’m taking a gap.

A mountain or hill pass.

The exploring party went through the high gap in the mountains.

A sheltered area of coast between two cliffs (mostly restricted to place names).

At Birling Gap we can stop and go have a picnic on the beach.

The regions between the outfielders.

Jones doubled through the gap.

The shortfall between the amount the medical insurer will pay to the service provider and the scheduled fee for the item.

To notch, as a sword or knife.

To make an opening in; to breach.

To check the size of a gap.

I gapped all the sparkplugs in my car then realized I used the wrong manual and had made them too small.

Samuel Johnson’s Dictionary (0.00 / 0 votes) Rate this definition:

Etymology: from gape.

1. An opening in a broken fence.

The loss of that strong city concerned the Christian commonweal: manifold and lamentable miseries afterwards ensued by the opening of that gap, not unto the kingdom of Hungary only, but to all that side of Christendom. Richard Knolles.

He’s made master
O’ th’ rolls and the king’s secretary: further
Stands in the gap, and treads for more preferment. William Shakespeare.

So stands the Thracian herdsman with his spear
Full in the gap, and hopes the hunted bear,
And hears him rustling in the wood. Dryden.

4. An avenue; an open way.

The former kings of England passed into them a great part of their prerogatives; which though then it was well intended, and perhaps well deserved, yet now such a gap of mischief lies open thereby, that I could wish it were well stopt. Edmund Spenser.

5. A hole; a deficiency.

6. Any interstice; a vacuity.

To make ’twixt words and lines huge gaps,
Wide as meridians in maps. Hudibras, p. ii. cant. 3.

7. An opening of the mouth in speech during the pronunciation of two successive vowels.

The hiatus, or gap between two words, is caused by two vowels opening on each other. Alexander Pope.

8. To stop a Gap, is to escape by some mean shift: alluding to hedges mended with dead bushes, ’till the quicksets will grow.

His policy consists in setting traps,
In finding ways and means, and stopping gaps. Jonathan Swift.

Webster Dictionary (0.00 / 0 votes) Rate this definition:

an opening in anything made by breaking or parting; as, a gap in a fence; an opening for a passage or entrance; an opening which implies a breach or defect; a vacant space or time; a hiatus; a mountain pass

to notch, as a sword or knife

to make an opening in; to breach

Etymology: [OE. gap; cf. Icel. gap an empty space, Sw. gap mouth, breach, abyss, Dan. gab mouth, opening, AS. geap expanse; as adj., wide, spacious. See Gape.]

Freebase (0.00 / 0 votes) Rate this definition:

Gap is a census-designated place and town in Salisbury Township, Lancaster County, Pennsylvania with a zip code of 17527. The population was 1,931 at the 2010 census. It is the terminus for four Pennsylvania highways: 772, 741, 897, and the heavily-used 41, which goes toward Wilmington, DE.

Chambers 20th Century Dictionary (0.00 / 0 votes) Rate this definition:

Dictionary of Military and Associated Terms (0.00 / 0 votes) Rate this definition:

An area within a minefield or obstacle belt, free of live mines or obstacles, whose width and direction will allow a friendly force to pass through in tactical formation. See also phoney minefield.

Dictionary of Nautical Terms (0.00 / 0 votes) Rate this definition:

A chasm in the land, which, when near, is useful as a landmark.

Military Dictionary and Gazetteer (0.00 / 0 votes) Rate this definition:

An opening for a passage or entrance; an opening which implies a breach. To stand in the gap, to expose one’s self for the protection of something; to make defense against any assailing danger. To stop a gap, to secure a weak point; to repair a defect.

A small town of France, capital of the department Hautes Alps. It was sacked and almost wholly reduced to ashes by Victor Amadeus of Savoy in 1692.

Suggested Resources (0.00 / 0 votes) Rate this definition:

Matched Categories

British National Corpus

Spoken Corpus Frequency

Rank popularity for the word ‘GAP’ in Spoken Corpus Frequency: #3004

Written Corpus Frequency

Rank popularity for the word ‘GAP’ in Written Corpus Frequency: #2651

Rank popularity for the word ‘GAP’ in Nouns Frequency: #1017

What does GAP stand for?

What does GAP mean? This page is about the various possible meanings of the acronym, abbreviation, shorthand or slang term: GAP.

Güneydogu Anadolu Projesi

Great Atlantic & Pacific Tea Company, Inc.

GTPase Activating Protein

Gap Analysis Project

Graduate And Professional

Gap Analysis Program

Good Agricultural Practice

Global Action Plan

Great Adventure People

Guaranteed Auto Protection

Guaranteed Asset Protection

Gimp Animation Package

Global Access Project

Great Ape Project

God Answers Prayer

Greyhound Adoption Program

Glock Automatic Pistol

God Answers Prayers

Gifts And Presents

Governance And Planning

Graduates And Professionals

Genocide Awareness Project

Gluteal Artery Perforator

What does GAP mean?

Popularity rank for the GAP initials by frequency of use:

Couldn’t find the full form or full meaning of GAP?

Maybe you were looking for one of these abbreviations:

Discuss these GAP abbreviations with the community:

Report Comment

We’re doing our best to make sure our content is useful, accurate and safe.
If by any chance you spot an inappropriate comment while navigating through our website please use this form to let us know, and we’ll take care of it shortly.

What does GAP stand for?

What does GAP mean? This page is about the various possible meanings of the acronym, abbreviation, shorthand or slang term: GAP.

Güneydogu Anadolu Projesi

Great Atlantic & Pacific Tea Company, Inc.

GTPase Activating Protein

Gap Analysis Project

Graduate And Professional

Gap Analysis Program

Good Agricultural Practice

Global Action Plan

Great Adventure People

Guaranteed Auto Protection

Guaranteed Asset Protection

Gimp Animation Package

Global Access Project

Great Ape Project

God Answers Prayer

Greyhound Adoption Program

Glock Automatic Pistol

God Answers Prayers

Gifts And Presents

Governance And Planning

Graduates And Professionals

Genocide Awareness Project

Gluteal Artery Perforator

What does GAP mean?

Popularity rank for the GAP initials by frequency of use:

Couldn’t find the full form or full meaning of GAP?

Maybe you were looking for one of these abbreviations:

Discuss these GAP abbreviations with the community:

Report Comment

We’re doing our best to make sure our content is useful, accurate and safe.
If by any chance you spot an inappropriate comment while navigating through our website please use this form to let us know, and we’ll take care of it shortly.