In the context of trading and chart analysis a gap is a huge and sudden change of price in a trading chart.
A price gap menas that there are no quotes between two price levels. The price either increased or decreased.
If, for example, Netflix announces a new blockbuster, which will double sales, no shareholder will sell his shares at the current price. This results in a gap or price jump to the upside. You can see these price jump in the picture above.
Why Do Gaps Happen?
Consider Possible Gaps
As a trader, you should always plan for possible gaps, because an order is not executed within a gap. For example, if you wanted to sell Netflix at $110, you were correctly executed at the next tradable price at $115. In this case, it is positive because you are 5$ better off selling. However, also think about the case when you wanted to buy at 110$, then you will be executed 5$ worse. This risk should be known and taken into account!