While pre-market gappers have high volatility, the combination of high volatility and higher than average volume is typically best for trading. Look for stocks that are experiencing trading volume greater than their 10-day average volume. You can also narrow your search by filtering on trading volume. Filtering for stocks with a gap of at least 1% is a good way to start scanning for pre-market gappers. You can further refine your search by adding filters for the magnitude of the price gap.
Simply search for stocks for which the current day’s opening price is greater or less than the previous day’s closing price. The easiest way to find pre-market gappers is to use a stock scanner. This above-average volatility may offer setups for trading, although it’s important to keep in mind that pre-market gaps aren’t always accompanied by high trading volume. If a stock is experiencing a large change in price between close and open, it’s likely that volatility will remain high once the market opens. More broadly, pre-market gaps are an indication of volatility. These events are likely to drive trading in a stock throughout the next day and could be a catalyst for a larger price movement than the one that starts during after-hours trading. That news could be an earnings reports, a major corporate announcement, or a political or economic event that impacts a company’s share price. Pre-market gappers are typically stocks around which there was significant news after market close. What is the Significance of a Pre-market Gapper? However, large gaps of 1% or more typically present the most trading opportunities. There is no minimum price difference between close and open required for a stock to be considered a pre-market gapper. Stocks can gap up or down – that is, their opening price can be higher or lower than their previous closing price. What is a Pre-market Gapper?Ī pre-market gapper is any stock that opens the trading day at a different price than the price at which it closed the prior day.
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In this guide, we’ll explain everything you need to know about pre-market gappers, including how to find them and how to trade them. These pre-market gappers offer many opportunities for traders in the first hours after the market opens. Thanks to after-hours trading and pre-market catalysts, it’s not uncommon for stocks to open at a significantly different price than the price at which they closed the afternoon before.
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