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  • April 28, 2021
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Gap Risk

The risk that arises when a break/ halt in trading is applied. As the name implies, this situation creates a gap in trading (price gap). Gaps can form during the trading day or or overnight (open price is significantly higher or lower than previous day’s close price). This may also happen when a stock trades right through the exit price.

The gap means that prices jump from a level to another, and in between there are no prices to trade at.

Intraday gaps may occur as a result of surprising news or trading halts.


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