Open gaps: price the market never traded

6 min read•Updated on 29 Oct 2026•by GeniAnalysis

A band of prices no candle has ever traded, how it is found, and what it does and does not tell you.

Most charts have gaps. A stock closes at one price and opens the next morning somewhere else, and for a moment there is empty space between two candles.

Most of that space does not stay empty for long. Within a few sessions the price usually trades back through some or all of it, and the gap stops being anything more than a detail of one morning.

An open gap is narrower than that. It is a band of prices that no candle has ever traded, not before the jump and not at any point since. It is a fact about the whole history of the chart, not about two neighbouring candles.

Ordinary gaps and open gaps

An ordinary gap is measured from one candle's close to the next candle's open. If Nifty closes at 24,000 and opens at 24,150, that is a 150-point gap up. Traders commonly call it filled once the price trades back to the previous close.

That gap may have no untraded space in it at all. If Nifty spent several sessions between 24,000 and 24,200 three weeks earlier, every price inside the jump has already traded. The open was unusual; the prices were not.

An open gap asks a stricter question. Across every candle on the chart, is there a band that nobody has ever bought or sold at? If there is, and some candle jumped across it to get from one side to the other, that band is an open gap.

How an open gap is found

Each candle covers a continuous stretch of prices, from its low to its high. Every price inside that stretch traded at some point during the candle.

Put every candle's range on one vertical line and merge them. Overlapping ranges join into longer blocks. What is left between the blocks are the holes: prices that sit inside the overall range of the chart and were never touched.

A hole counts as an open gap when one candle sat entirely on one side of it and the next candle sat entirely on the other. That is a jump across the band.

Once any later candle trades into the band, the part it touched is no longer untraded. If it reaches only partway, the open gap shrinks to what is left. If it trades all the way through, the gap is gone.

A worked example

Five daily candles on a stock trading near 1,000.

Day 2 closes at 1,025 and Day 3 opens at 1,055. As an ordinary gap, that is 30 points, close to open.

The open gap is smaller. Days 1 and 2 merge into one block, 1,000 to 1,030. Day 3 trades entirely above it, from 1,050 to 1,070, which leaves 1,030 to 1,050 untouched: 20 points.

Day 4 dips to 1,040. Everything from 1,040 to 1,050 has now traded, so the band shrinks to 1,030 to 1,040. Day 5 stays above 1,045 and changes nothing. After five days the traded prices form two blocks, 1,000 to 1,030 and 1,040 to 1,075, with a 10-point open gap between them.

The ordinary gap would be called unfilled here, since the price has not been back to 1,025. The open gap describes something more specific: the exact prices still missing from the record.

The Nifty weekly gap of December 2023

On Nifty's weekly chart there is an open gap from 20,291 to 20,507, 216 points wide, a little over 1 per cent of the price at the time.

It comes from the week of 4 December 2023. That week opened above every price Nifty had traded until then, so 20,291 was the highest level on record and the band had no history beneath it to fill it in. No weekly candle since has traded inside the band.

That is what makes it an open gap and not an ordinary one. There was nothing before it, and nothing after it has come back.

Why some open gaps stay open for years

The cleanest open gaps form when a market jumps to a level it has never traded before. There is no earlier history in the band, so only a move back down can fill it.

If the market keeps moving away, that move gets larger with time. With Nifty at 24,000, for example, the top of the December 2023 band at 20,507 sits 3,493 points lower, about 14.6 per cent. A band that far from the price can go untouched for a long time without anything unusual happening.

Gaps that form inside an old trading range rarely last. Most of the prices in the jump were already traded on the way up or down earlier, so the open part, if any, is thin.

How an open gap differs from a fair value gap

A fair value gap is a three-candle pattern. In a rising version, the first candle's high sits below the third candle's low, and the space between them is the gap.

Take a first candle with a high of 1,020, a second candle from 1,015 to 1,060, and a third with a low of 1,045. The fair value gap is 1,020 to 1,045, 25 points. But the second candle traded straight through that band. Every price in it changed hands.

So a fair value gap describes an imbalance: the price moved through a band quickly, with little overlap between the candles either side. It is never an untouched band, because the middle candle always trades through it. An open gap has no middle candle. The jump is between two neighbouring candles, and no candle has touched the band since.

When history restarts, and what is left out

Some jumps are not market moves. A 1:1 bonus halves the share price overnight, so a stock at 2,000 opens near 1,000. A split does the same at a different ratio. Merged naively, that would show a huge band left untraded below the old price, created by the corporate action and not by any trading.

To avoid that, history restarts after a jump of 25 per cent or more between two candles. Only the candles after the jump are merged. History also restarts after a long break in the data, since a hole across a missing stretch says nothing about what traded in it.

Tiny bands are ignored. A band is dropped if it is smaller than a quarter of the median candle range, or under 0.1 per cent of the price. In the worked example the ranges are 20, 20, 20, 20 and 30 points, so the median is 20 and the floor is 5 points. The 10-point band stays. Had Day 4 dipped to 1,034 instead, the band left would be 1,030 to 1,034, 4 points wide, and it would be dropped. Bands that narrow are mostly tick-by-tick noise.

Daily and weekly

A weekly candle covers every trade in its week, so its range is at least as wide as the ranges of the daily candles inside it. A gap that opens on Monday and trades back by Thursday disappears entirely on the weekly chart.

That makes weekly open gaps rarer and wider. Any band the weekly candles never touched, the daily candles never touched either. The reverse does not hold: the daily chart carries many short-lived bands that the weekly chart never shows.

The thresholds scale too. A weekly candle's range is larger than a daily one, so the floor for what counts as tiny is higher on the weekly chart.

What an open gap does not tell you

An open gap is a record of where trading did not happen. That is all it measures.

It is not a target. The common saying that gaps always fill describes the many gaps that did and passes over the ones that have not, some of them for years. Nothing obliges the price to return to an untraded band, and nothing in the band says whether the price comes back, or when.

It also carries no information from inside the band, because there were no trades there to record. It shows where the price jumped, and where the price has not been since.

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