What An Overnight Gap Actually Tells You

Everyone braces for the big overnight gap, and this Cboe backed study says it barely happens. Across roughly 2,400 SPY sessions, nine in ten overnight moves landed inside a one percent band, and the direction of the gap said almost nothing about how the day closed. What it did predict was whether it would fill, and small gaps filled far more often than large ones. Elevated volatility changed that by widening the intraday range. A fill signal, not a forecast. Study results are historical, not predictive. 📊 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 What the study looks at 00:32 How the study was built 01:28 The distribution of overnight moves 02:33 How rare the big gaps are 03:47 Does the gap predict direction 05:06 Why day by day is hard 06:17 Longer horizons behave differently 07:18 What elevated volatility does 09:35 The takeaways from the study 11:13 How he uses it in practice 12:25 Why volatility beats price #tastylive #overnightgaps #gapfill #spy #optionstrading #impliedvolatility #daytrading #marketresearch #optionseducation #trading 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.