Gap Up

A gap up is an open above the prior session's close, leaving a stretch of prices where no shares traded. The gap exists because news landed while the market was closed and buyers repriced the stock before the opening bell rather than after it.

Size matters more than direction alone. A 2% gap on a mega cap is routine noise; a 40% gap on a small cap with a fresh catalyst is the kind of open that fills a day trader's scanner. The open price also becomes a reference level: holding above it is strength, losing it early is the first warning the gap may fill.