What is the price gap?

and The price gap is the term used to describe the change in security from the last range of trading without overlapping this previous range. In fact, there are several different types of gaps, including detached space, common price gaps, gaps in escape and gap in prices. Each of them describes different events that can take place and lead to a certain type of movement up or down in the price of a particular security from one period to another.

In general, the price gap is to do with recording an increase or decrease in the prices of securities that differ from the previous price range. This often includes the consideration of price movement on a particular business day, including the final price for the share at the end of this day. If safety is open at a price that is slightly higher than the closure of the previous day, and continue trading to the extent that is higher or lower than the previous day, then it is said that there is a price gap.

For example, let's assume that specific security was traded between $ 25 (USD) and $ 30 per share for a given date, and at the end of the day it was closed to $ 30 per share. If the same security opens for $ 32 on the following business and is permanently traded between $ 32 and $ 35 throughout the day, there was a price difference between two trade periods. A gap would also be present if the on the second business day opened the shares for the rate below the final price of the previous day and traded permanently under the $ 25 price, which was involved in trading during the previous commercial range.

Price gap monitoring is important because the amount and frequency of these gaps can provide valuable information about what is happening with a given stock, and perhaps with the market in general. Depending on whether the gap or decrease in the previous quoted extent may indicate that the supply was either overflowed or the automaticEditable. The gaps may also indicate the degree of impact that certain events develop at the request of the share offerings among investors. For example, if a significant gap in the price of the shares has moved to a significant price difference after the President of the Publishing Society and his successor, it can mean a great confidence or lack of confidence in depending on the direction of prices ranged between two periods considered.