Gap Up
An opening price above the previous period's high, leaving an unfilled space on the chart.
Formula
Test: Current Open > Previous High
Unit
%
In depth
A gap up means the auction cleared above everything that traded in the prior session, so overnight buyers outbid every price the previous day contained. Traders distinguish this strict definition from the looser everyday usage of opening merely above the previous close, and the two describe quite different events. Chasing a gap up with a market order is a recognised way to buy the day's high, because the auction has already absorbed the news the buyer is reacting to. Whether a gap is subsequently filled is not predictable and this entry offers no view on it.
Worked example
Previous session high ₹412, previous close ₹400, today's open ₹436. This is a true gap up of 24 / 412 = 5.8% above the prior high, not merely 9% above the prior close.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Gap Up” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.