Decoded Intelligence Signal
Gap Risk
advanced
strategy
Verified: May 27, 2026Lexicon Core Definition
The risk that price opens significantly higher or lower than the previous close, bypassing a stop-loss order set at a price level between the prior close and the new open. Gap risk is inherent to any strategy involving overnight holding periods and is managed through position sizing rather than stop placement — smaller positions reduce the dollar impact of any gap.
Analysis Breakdown
The risk that price opens significantly higher or lower than the previous close, bypassing a stop-loss order set at a price level between the prior close and the new open. Gap risk is inherent to any strategy involving overnight holding periods and is managed through position sizing rather than stop placement — smaller positions reduce the dollar impact of any gap. Full explanation coming soon when Journey 18 content is ingested.