Gap Risk Definition

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Definition Of Gap Risk:

The risk that an investment's price will change from one level to another with no trading in between.
Usually such movements occurwhen there are adverse news announcements, which can causea stock price to drop substantially from the previous day's closing price.For example, gap risk is the chance thata stock's pricecloses at $50 and opens thefollowing trading day at $40 - even though no trades happen between these two times.

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