ConceptUpdated 2026-10-19
Gap risk: when the stop doesn't save you
If a stock opens below your stop, the stop fills at the open, not at your price. Holding overnight always carries this risk, and the record shows it.
Markets close overnight, and news doesn't wait. When a stock opens below your stop, the order triggers and fills at whatever the open is. Your planned −1R becomes something worse.
From the record
- HTFL: the stop was 49.29. It opened lower and filled at 49.20. A small gap, a small cost.
- INTW: a raised stop at 29.60 filled at 28.97 when it gapped lower at the open. The trade still finished slightly green, but only because earlier trims had banked profit.
What to do about it
- Size so a gap is survivable. Plan for the stop plus a gap, not just the stop.
- Trim into strength. Banked partials soak up gap losses on the rest.
- Know the calendar. Earnings and big macro releases are where the large gaps live.
You can't remove gap risk from overnight holds. You can only size for it.
Trades that cite this
1 finished · win rate 0% · expectancy -0.78R · total -0.78R
Related
- Position sizing: size comes from the stopYou don't pick how many shares to buy. You pick how much you're willing to lose and where your stop is; the share count falls out of the math.
- R: measuring every trade by its riskR is the amount you planned to lose if the stop hit. Every result on this site is a multiple of it, so a trade reads the same at any account size.
- Stops are live ordersThe stop is a working GTC order at the broker the same session it's decided, and the journal matches it. A stop that only exists in your head isn't a stop.
- The stop: deciding where you're wrongA stop is the price that proves the trade idea wrong. It's chosen before entry, placed as a live order, and only ever moved in your favor.