GAP TRADES

A “Gap Trade” occurs when shares are purchased below the current Buy Limit, or shares are sold short above the Sell Limit. A Gap Trade can occur because of a gap down, or gap up, at the open, a significant sell off intraday, or if a buy order is on hold and the price falls below the buy limit over time.

In the case of a situation where the price falls below the current buy limit while the buy order is on hold you can use the Gap Order Calc tab to determine the number of shares to buy to rebalance the cycle down to the current market level.

When entering a filled buy order that is below the current buy limit order the system will accept the fill price. However, in order to keep the current cycle intact, the next orders will be calculated based on the buy limit price, not the actual fill price. The actual fill price will be reflected in the order history as well as recalculating the average cost per share. This is also true for a sell short order.

You will find a Gap Calculator on the Trade page. This only relates to buy / sell short orders and only calculates when the fill is entered and the gap is larger than one trade range. It will show how many shares to trade to fill the gap, so rather than entering multiple trades you will know how many shares to trade to fill the gap. You will then enter each ttrade at the fill price and the system will step down one trade range per entered order until the current cycle series is at parity.