Market gap

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    Market gap

    market gapA market gap is a difference between the closing price of ... More is a difference between the closing priceWhat are value stocks? A value company is a company that app... More of one period and the opening priceWhat is price? The price is the measure of the value of goo... More of the next period.

    MarketWhat are value stocks? A value company is a company that app... More gaps are most often created between trading sessions, such as during the night or over the weekend. A simple example would be a company surprisingly announcing its bankruptcy on a Saturday – traders would panic, and the opening price on Monday could open below the closing price on Friday.

    This example shows that market gaps can be created by changes in the market sentiment, often caused or fuelled by fundamental changes.

    Such fundamental changes include surprises to the financial marketA financial market is a type of market where traders, corpo... More, such as natural disasters, political turmoil, acts of terrorism or simply a high impact news event.

    The gap does not necessarily occur during the overnight period when markets are usually closed – it can also happen on a shorter time frame.