Fill the Gap - futures trading

Go Back

> Trading Wiki > Terms (Glossary)

Fill the Gap

A gap is defined as an unfilled space or interval. On a technical analysis chart, a gap represents an area where no trading has taken place.

Mostly traders are talking about a gap between yesterday's cash/RTH close price and today's open/RTH price. As such Fill the Gap generally is only relevant to instruments that have an underlying Cash market that is open for limited hours during the day vs. the futures instrument which is open for trading for nearly 24 hours a day.

The best example is the US stock exchanges (NYSE, NASDAQ etc) which typically open for trades from 9.30am US ET to 4.00pm US ET, whereas the underlying futures instruments (ES, NQ, YM, TF etc) are basically open for trading 23 hours a day. So a Fill the Gap on these futures instruments occurs when today's 9.30am futures price is higher or lower than yesterday's 4.00pm futures closing price and acknowledges that the Cash market will often go back and test yesterday's closing price.

Fill the Gap is not so relevant for financial instruments like Oil, Gold or currencies as these tend to trade nearly all day (even if the have an underlying cash or spot market). Although gaps can occur after weekends or holidays.

In an upward trend, a gap is produced when the highest price of one day is lower than the lowest price of the following day. Thus, in a downward trend, a gap occurs when the lowest price of any one day is higher than the highest price of the next day.

See also:
Created by  steve2222 , February 16th, 2016 at 06:19 AM
0 Comments, 888 Views
Page Tools
Search this Page

Posting Rules
You may not create new articles
You may not edit articles
You may not protect articles

You may not post comments
You may not post attachments
You may not edit your comments

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

All times are GMT -4. The time now is 07:02 PM.

Copyright © 2016 by All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.

Page generated 2016-10-27 in 0.09 seconds with 19 queries on phoenix via your IP