You now know price is a continuous negotiation (Chapter 1) opened each day by an auction (Chapter 5). A gap — today's open printing away from yesterday's close, leaving empty space on the chart — is simply what happens when the negotiation is forced to pause while the world keeps moving.
Between 3:30 PM and 9:15 AM, everything continues except matching: results drop after close (deliberately — companies time announcements for the pause), US markets trade a full session, global commodities and currencies move, geopolitics happens, GIFT Nifty (the offshore Nifty derivative trading nearly round-the-clock) keeps a running estimate of where India would be trading. By 9:00 AM, fifteen hours of opinion are queued with nowhere to have gone. The pre-open auction (Chapter 5) collects it all and settles the entire overnight argument into a single equilibrium print. If that print is 1% above yesterday's close — that's your gap-up. Nothing was skipped; the negotiation happened, compressed, in the auction. The empty chart space just marks prices where the machine was never open to match.
This mechanical framing kills the beginner's instinct that a gap is somehow "unfair" or "must be filled" by cosmic law, and replaces it with the productive question: what does this particular gap represent? Two structurally different answers exist. A gap driven by genuine new information (results, RBI decision, a global shock) is repricing — the auction moving value to where the news says it now belongs; there is no reason such a gap "should" fill. A gap driven by thin overnight sentiment — mild global drift, no India-specific news — is an opening print stretched away from where actual business will occur; when the full-liquidity regular session arrives, price frequently negotiates back toward yesterday's well-traded zone. That return trip is the famous gap fill — not magnetism, just a thin print being corrected by a thick market.
Distinguishing the two — repricing vs. stretch — is the entire practical craft of gap trading, and Chapters 16–17 build it out. The inputs you'll use are ones this school already gave you: what news actually arrived (is there fuel?), how the gap behaves in the first minutes of thick liquidity (Chapter 5's opening phase), and where the gap sits relative to structure (did it clear a range edge — a BOS by auction? — or just drift within yesterday's territory?).
Key Takeaway
A gap is the overnight argument settled in one auction print — repricing when real information arrived, a stretch when thin sentiment drifted. No law says gaps fill; thin prints get corrected, real repricing doesn't. The first question of every gap: what's the fuel?
Think About It
Why do Monday gaps tend to be larger than Tuesday–Friday gaps? (Count the hours of queued world. Now you also know why weekend risk is a real position-sizing input for your overnight strangles.)
Structure Lab — Fuel Audit, 10 Gaps
For the next 10 Nifty opening gaps (or pull the last 10 from charts), record: gap size and direction, the actual overnight news (two-minute scan), and whether the gap filled that day. Sort into "clear fuel" vs. "no clear fuel" — and compare fill rates between the two piles. You've just tested this chapter's central claim on live data.