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General TradingG
Gap Down
A gap down occurs when an asset opens at a price significantly lower than the previous session's close, leaving a visible gap on the chart with no trades in the intervening price range. Gap downs are often caused by negative news, poor earnings reports, or adverse overnight market developments.
Example
“After the company issued a profit warning after hours, the stock gapped down 8% at the next morning's open, triggering stop-loss orders for many long positions.”