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Weekend gap

The difference between Friday's closing price and the following Sunday or Monday opening price, created because news continues over a weekend while the market is shut.

Forex trades continuously from the Sydney open to the New York close, then stops for roughly 48 hours. Elections, central bank announcements, geopolitical events and political weekends all land in that window, and the first quote of the new week reflects them in one jump.

Stops do not protect through a gap. A stop is an instruction to become a market-order once touched, so it fills at the first available price, which can be far beyond the level. The same applies to a take-profit, which fills at the better price rather than worse.

The first minutes of the week also carry the widest spreads of any period outside a major news release, so the opening print is a poor reference for whether a gap is real.

Example: long 1 standard-lot of EUR/USD from 1.0840 with a stop at 1.0800. A referendum result opens the market at 1.0690. The stop fills there, a 150-pip loss of $1,500 rather than the intended $400.

Related: holiday-liquidity, spread-widening, guaranteed-stop-loss, slippage

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

Bid-ask spread in an order bookSell orders stacked above buy orders with a gap between the best of each.SELLERS (asks)50.0690050.051,40050.0460050.011,10050.002,30049.99800spread = 0.03BUYERS (bids)
The bid-ask spread. Buy orders sit below, sell orders above, and the gap between the best bid (50.01) and best ask (50.04) is the spread you pay to cross. Bar length shows the size resting at each price.

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