Playing The Gaps: What To Know And How To Trade Using Benzinga Pro

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What Are Gaps? Gaps are sharp fluctuations in stock prices, often with no trading in between. The four basic types of gaps are common, runaway, breakaway, and exhaustion gaps.

Common gaps are usually uneventful, stemming from events such as companies going ex-dividend. Runaway and breakaway gaps both signify an upwards trend in tickers, with runaway gaps reinforcing current trends and breakaway gaps starting new trends based on exciting events like news catalysts and positive earnings reports. Exhaustion gaps come at the end of tickers’ upwards runs and usually mark the start of downwards trends.

It's important to be able to recognize patterns surrounding gaps to determine what kinds of gaps are present in a stock’s graph. Traders who do so can use this information to predict a stock’s upcoming trend.

Capitalizing on Gaps with Benzinga Pro: Benzinga Pro offers traders the ability to take advantage of gaps. Users can combine the Movers, Signals, and Screener capabilities to filter for opening gaps in the market and define their positions accordingly.

Options such as specifying for gainers or losers, session and period, sector, market cap, and price let subscribers gain insight on every corner of the markets to find gaps in the most desirable stocks.