What a Gap Down Actually Does to the Market, 15 Years of Data

Gap downs have been piling up, so Kai dug into almost 15 years of SPX data to show what one actually does the next day, tailored to zero-DTE traders. The myth-buster: no matter how big the gap down, the average open-to-close is basically flat, about 0%, same as any other day. What changes is the range, blowing out to as much as 4.5x a normal day, and the VIX jumps, mostly overnight. Two more findings: gap downs barely cluster, and the gap rarely fills same-day. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 Two research pieces today 00:24 What a gap down actually does 01:06 Defining a gap down, half a percent plus 01:20 How often they happen, 1 in 7 days 03:51 The myth-buster, average is flat 05:32 But the range blows out 07:35 The VIX jump is mostly overnight 09:30 Do gap downs cluster? Barely 11:32 Why two losses in a row is rare 12:25 The gap rarely fills same-day #tastylive #marketmeasures #gapdown #spx #zerodte #tradingrange #vix #optionseducation #optionstrading #stockmarket tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.