Stock gap calculator
An opening gap can be harmless noise or a real change in how the market prices a stock, and you can only tell by comparing it with yesterday's range and the stock's usual daily move. Enter yesterday's close, high and low, today's open and the ATR, and the calculator sizes the gap, classifies it and maps each level on the way back to a fill. It also prices a fade and a follow trade, so you can see which side has the better reward to risk.
How large is this gap?
The gap beside the stock's normal daily move and yesterday's full range.
Stages of a gap fill
Where each stage of a fill sits, its distance from the open, and what a fade from the open would earn at that level with a stop beyond the open.
| Level | Price | Distance from open | Fade reward to risk |
|---|
How the gap is measured
Everything is measured from yesterday's close, the level a gap fill returns to. Whether a gap is full or partial depends on yesterday's high and low.
Gap size
The distance between yesterday's close and today's open.
gap = open − previous close; gap % = gap ÷ previous close
Gap type
A full gap up opens above yesterday's high, a full gap down below yesterday's low, and anything else is partial.
full up if open > previous high
Gap in ATRs
How unusual the gap is for this particular stock.
gap in ATR = |gap| ÷ ATR
Fill levels
A quarter, a half, three quarters and the whole way back to the close.
level = open − gap × share filled
Fade trade
Enter against the gap at the open, with the stop beyond the open by your ATR setting.
reward to risk = distance to level ÷ (stop × ATR)
Stock gap FAQ
What is a gap in a stock?
A stock gaps when it opens at a different price from the previous close, leaving a blank space on the chart. Gaps usually follow news released outside trading hours, such as earnings, guidance, analyst changes or big overnight market moves.
How is a full gap different from a partial gap?
A full gap up opens above the previous day's high, so there is no overlap with yesterday's range. A partial gap up opens over the previous close yet still within yesterday's range. Full gaps signal a stronger shift in demand and fill less often the same day.
What does "the gap filled" mean?
Price has travelled back to the previous close, closing the blank space on the chart. Many small gaps fill within days, but big gaps on major news can stay open for a long time. Gap faders aim for the fill; gap followers bet against it.
Why compare the gap with ATR?
A 3 percent gap is enormous for a sleepy utility and routine for a volatile small cap. Dividing the gap by the average true range shows how unusual it is for that stock, and gaps over one ATR are significant moves.
How is a gap fill traded?
A gap fade enters against the gap near the open, targets the previous close and puts a stop beyond the opening move, often a fraction of ATR away. The calculator shows the reward to risk of that setup so you can judge whether it is worth it.
Is fading an earnings gap a good idea?
Earnings gaps carry real information and often keep moving in the gap's direction, so fading them is riskier than fading gaps with no news. Find out why the stock gapped before trading it.