Gap Risk


DEFINITION of 'Gap Risk'

The risk that an investment's price will change from one level to another with no trading in between. Usually such movements occur when there are adverse news announcements, which can cause a stock price to drop substantially from the previous day's closing price.


For example, gap risk is the chance that a stock's price closes at $50 and opens the following trading day at $40 - even though no trades happen between these two times.

  1. Gap

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  3. Exhaustion Gap

    A gap that occurs after the rapid rise in a stock's price begins ...
  4. Risk

    The chance that an investment's actual return will be different ...
  5. Common Gap

    A price gap found on a price chart for an asset. These gaps are ...
  6. Breakaway Gap

    A term used in technical analysis. A breakaway gap represents ...
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