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Market Intelligence › Basic Terminologies
News that arrives overnight and the next morning's opening
Published by The Retail Trader · JUL 30, 2026 · Risk Management
A stop loss works during trading hours. The world does not stop once the market closes, and the next morning the price can open straight below your stop.
Results, global markets, policy announcements and company-specific news — all of it can arrive after the market closes. The effect of all of it lands at once in the opening price.
That morning your stop loss will trigger, but the fill will be wherever the market opened — not at your stop price.
Stopping a gap is not possible; managing its size is:
• Keep the size of an overnight position smaller than the intraday size.
• Review the position before the result date.
• Do not let overnight exposure pile up in a single sector.
• In options, a defined-risk structure is more predictable against a gap.
Position size is the one control that works against a gap. A stop loss protects you on a normal day; size protects you on the one day when the stop loss will not work at all.
This article is for educational purposes only — it is not a buy or sell recommendation, makes no claim of guaranteed returns, and is not advisory. Rules, rates and mechanics are changed by the exchanges, SEBI and RBI from time to time, so verify every number yourself with your broker or the official source.