Stock gap calculator
A gap at the open can be ordinary noise or a big shift in how the market values a stock, and the difference shows up when you compare it with yesterday's range and the stock's normal daily move. Enter yesterday's close, high and low, today's open and the stock's ATR, and this calculator measures the gap, classifies it and maps the levels on the way back to a fill. It also prices a fade and a follow trade, so you can see which side offers the better reward to risk.
How big is this gap?
The gap next to the stock's normal daily move and yesterday's whole range.
Levels on the way to a fill
Where each stage of a gap fill sits, how far it is from the open and what a fade trade from the open would make at each level against 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, which is the level a gap fill returns to. Yesterday's high and low decide whether the gap is full or partial.
Gap size
The distance from yesterday's close to 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. Anything else is partial.
full up if open > previous high
Gap in ATRs
How unusual the gap is for this stock.
gap in ATR = |gap| ÷ ATR
Fill levels
A quarter, half, three quarters and all of the way back to the close.
level = open − gap × share filled
Fade trade
Enter at the open against the gap, stop beyond the open by your ATR setting.
reward to risk = distance to level ÷ (stop × ATR)
Stock gap questions
What is a stock gap?
A gap is when a stock opens at a different price from where it closed the day before, leaving an empty space on the chart. Gaps usually follow news released outside market hours, such as earnings, guidance changes, upgrades or broad market moves overnight.
What is the difference between a full gap and a partial gap?
A full gap up opens above the previous day's high, so there is no overlap with yesterday's range at all. A partial gap up opens above the previous close but still inside yesterday's range. Full gaps show a stronger shift in demand and fill less often on the same day.
What does it mean when a gap fills?
The price travels back to the previous day's close, closing the empty space on the chart. Many small gaps fill within days, but large gaps on major news can stay open for a long time. Traders who fade gaps aim for that fill; traders who follow gaps bet it will not happen.
Why measure the gap in ATR?
A 3 percent gap is huge for a slow-moving utility and ordinary for a volatile small cap. Dividing the gap by the average true range shows how unusual it is for that particular stock. Gaps of more than one ATR are significant moves.
How do I trade a gap fill?
A gap fade enters against the gap near the open, targets the previous close and places a stop beyond the opening move, often a fraction of the ATR away. The calculator shows the reward to risk of that setup so you can see whether it is worth taking.
Is it safe to fade earnings gaps?
Earnings gaps carry real information and often keep going in the direction of the gap. Fading them is riskier than fading gaps on no news. Check the reason for the gap before you trade it.