When a market is closed – such as during weekends, public holidays, or scheduled daily breaks – trading activity is paused, and no new prices are generated. However, important global events, economic announcements, political developments, or other breaking news can naturally still take place while the market is inactive. These external factors may significantly influence traders' expectations and market sentiment.
As a result, a market may not reopen at the same price as when it closed. Instead, price may be noticeably higher or lower due to changes in supply and demand during the closure. This phenomenon is known as a price gap and is particularly common in volatile markets or during times of heightened uncertainty. Traders should be aware of this possibility and consider it when managing their risk and planning their positions.