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Why a gap forms, which gaps get filled, and the first 15 minutes after the open
Published by The Retail Trader · AUG 09, 2026 · Features
The market is closed but the world doesn't stop. News comes in overnight, global markets trade, results are announced. When the market opens in the morning, all of that accounting lands in price in a single jolt. That jolt is called a gap.
Because no trading happens while the market is closed. If big news came overnight, price can't reach it gradually — it opens straight where everyone thinks it should be.
That is why a stop loss doesn't work across a gap. If your stop was at 100 and the stock opened at 92, you will exit at 92. This is not the broker's mistake; it is the nature of a gap.
Broadly, three kinds of gaps are seen:
• Common gap — a small gap with no particular reason. It is often filled the same day or within the next few days.
• Breakaway gap — breaking out of a range or level, with heavy volume. It is often not filled and marks the start of a new move.
• Exhaustion gap — right at the end of a long move, with a last burst of energy. A reversal after it is common.
The difference isn't known immediately. On the first day all three often look alike — the identification comes later, and that is the real honesty of this topic.
Very small gaps often get filled, which is why this saying became popular. But a big gap created by major news may not be filled for years, and sometimes never.
Building a trade on this line is dangerous because: the gaps that fill are small and the profit from them is small, while the ones that don't fill are big and the loss from them is big.
The first part of the day is often the most volatile, because all the overnight orders arrive at once and price is looking for its balance.
For this reason many traders spend the first few minutes only watching. The high and low formed in that period become a reference for what follows, and a decision taken in that noise often turns out to be the worst decision of the day.
This article is for educational purposes only — it is not a buy or sell recommendation, makes no claim of guaranteed returns, and is not advice. Rules, rates and mechanics are changed from time to time by the exchanges, SEBI and RBI, so verify every number yourself with your broker or an official source.