Core terms
Gap up / gap down
A gap is the difference between a session's opening price and the previous session's close. A gap up opens above the prior close; a gap down opens below it. The gap percentage is (open − prior close) ÷ prior close.
A gap compares two specific prices: the regular-session open (09:30 ET) and the previous regular-session close. Scanners often show a different number before the open, the premarket change, which compares the latest premarket trade with the prior close. The two can differ a lot: a stock can be up 80% at 08:00 and open up 40%.
Gaps happen because news, filings and extended-hours trading move the price while the regular session is closed. The opening print comes from the listing exchange's opening auction, so it reflects the orders queued at 09:30, not the last premarket trade.
How often gappers hold
Of 671 US common stocks and ADRs that opened at least 20% above the prior close (2026-07-01 to 2026-10-02; FennEdge study, as of 2026-10-02), 65.3% closed below their open and 9.2% closed below the prior close. These are base rates for that window, not a forecast for any stock.
What traders should verify
Check which prices a scanner's "gap" uses (open vs. latest premarket trade, and a split-adjusted prior close) before comparing numbers across tools. Record the catalyst and whether the company has active offering capacity.
Do not conflate
Trader usage for the label; the arithmetic is standard. A large gap says the price moved, not why, and not what the rest of the session will do. After a reverse split, an unadjusted prior close produces a meaningless gap figure.
Primary source
Trader usage: there is no official definition, and platforms and tools may calculate it differently.