Define: Price Gap

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Definition: Price Gap



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Full Definition of Price Gap


A price gap is simply an area within a particular time boundary of activity on a stock price chart, showing a price range where no actual trading occurred. There are generally four different types of price gap: the common price gap, breakaway price gap, runaway price gap, and the exhaustion price gap. A common price gap is a blank area between two consecutive day’s trading ranges. For example, today’s lowest price is higher than yesterday’s highest price. Technical analysts tend to believe that this type of price gap has no significance. A breakaway price gap occurs when prices suddenly explode out of a congestion formation, leaving behind an empty area in which no trading has taken place in a considerable length of time or in which no trading has ever taken place. Technical analysts tend to believe that this type of price gap may signal the beginning of a new major trend. A runaway price gap appears following an already substantial price move, signalling a further continuation of the established trend. An exhaustion price gap is the opposite, marking a reversal of or the final stages of a previous major trend.


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Price Gap. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 07, 2020 https://payrollheaven.com/define/price-gap/.
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Price Gap. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/price-gap/ (accessed: April 07, 2020).
American Psychological Association (APA):
Price Gap. PayrollHeaven.com. Retrieved April 07, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/price-gap/

Definition Sources


Definitions for Price Gap are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 6th February, 2020