Gap Risk

Gap risk is the risk that price opens the next session significantly away from where it closed, jumping straight past any stop-loss level rather than trading through it — most commonly seen over the weekend or around major surprise news. Because a gap can't be traded through, a stop-loss can fill far worse than set, exposing the position to a loss beyond the intended risk. Gap risk is highest for positions held over the weekend or into a scheduled high-impact event, which is why many traders reduce size or close out entirely ahead of both.