Gap Risk

Gap Risk

The risk that a stock will fall dramatically in price from one trade to the next. For example, gap risk is the possibility that one will lose on an investment if a stock falls from, say, $120 to $95 per share in a single trade. This only occurs when there is a significant and sudden drop in demand for the stock.
References in periodicals archive ?
The SEC states that Deutsche Bank was protected "only up to the collateral level and not for the full market value of its credit protection," and that "Deutsche Bank initially took the gap risk into account in its financial statements by adjusting down the value of the LSS positions.
With the broader and larger investor base that is caused by the MSCI upgrade, equities in the UAE and Qatar are likely to see greater average daily trading volumes, decreased average volatility, decreased gap risk, more resilience to internal and external shocks or black swan events and greater transparency.
Key to this success is developing transparency across these risk buckets to enhance communication and minimise potential gap risk from falling through the cracks.
Another risk that must be addressed on this stage is the performance gap risk, which is in the form of forced interruptions (i.
Thus, to the extent that the mezzanine lender is amenable to accepting a policy with an effective date prior to the making of its loan (and with the attendant gap risk for matters arising in the interim), that option is available and the cost would be for the endorsement only, as the policy would have been previously issued and paid for.
Passengers who aren't mindful about the gap risk harmful or even lethal consequences.
Models are almost inevitably less volatile than reality because it is difficult to factor in gap risk and behavioral response.
And, to help reduce Gap Risk, documents should be recorded with their county recorder immediately after closing.
Best's concerns that the risk-based capitalisation for L&G may further deteriorate in the event of a further fall in asset values and a decrease in the long-term yields, which will heighten the assets and liabilities' gap risk.
The digital gap risks becoming a chasm with AI set to transform the face of UK businesses.
This is because market moves are generally without the gap risks thatare present in some other markets.